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ANNUAL REPORT 2009-101

GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITED 16TH ANNUAL REPORT 2009-10

Board of Directors Registered Office

A. P. Kurian : Chairman 5th Floor, Finance Tower, Kaloor

C. J. George : Managing Director Kochi - 682 017, Kerala, India

R. Bupathy

Alkeshkumar Sharma Website

Mahesh Vyas www.geojitbnpparibas.com

Olivier Daniel Andre Le Grand

Pierre Rousseau Statutory Auditors

Punnoose George Deloitte Haskins and Sells

Rakesh Jhunjhunwala Chartered Accountants

Wilmont Park Business Centre

Warriam Road

Kochi - 682 016

Management Team Registrar & Share Transfer Agents

C. J. George : Managing Director S.K.D.C. Consultants Limited

Binoy V Samuel : Chief Financial Officer Kanapathy Towers, 3rd Floor,

Satish Menon : Director (Operations) 1391/A-1, Sathy Road, Ganapathy,

A. Balakrishnan : Chief Technology Officer Coimbatore - 641 006

Martin Zachmeier : Director (Planning and Control)

Jaya Jacob Alexander : Chief of Human Resources

K. Venkitesh : National Head – Distribution

Bankers

Axis Bank Ltd.

HDFC Bank Ltd.

State Bank of India

Federal Bank Ltd.

BNP Paribas S.A.

Citibank N.A.

Company Secretary Listed at

T. Jayaraj National Stock Exchange of India Limited

Bombay Stock Exchange Limited

ANNUAL REPORT 2009-10 2

CONTENTS

Page

From the Chairman’s Desk................................................................................................ 5

Notice.................................................................................................................................. 6

Directors’ Report................................................................................................................ 13

Corporate Governance Report............................................................................................. 20Management Discussion and Analysis................................................................................ 28

Standalone Financial Statements

Auditors’ Report.................................................................................................................... 31Balance Sheet...................................................................................................................... 34Profit and Loss Account ...................................................................................................... 35Cash Flow Statement............................................................................................................ 36Schedules to Accounts......................................................................................................... 37

Consolidated Financial Statements

Auditors’ Report.................................................................................................................... 63Balance Sheet...................................................................................................................... 64Profit and Loss Account........................................................................................................ 65Cash Flow Statement............................................................................................................ 66Schedules to Accounts......................................................................................................... 67

Details of Subsidiaries....................................................................................................... 82


CONSOLIDATED FINANCIAL SUMMARY

(Rs.in lakh)

Particulars 2009-10 2008-09 2007-08 2006-07 2005-06

Income from Operations 28,011 17,497 22,719 13,353 10,103

Other Income 2,400 1,700 1,729 257 93

Total Income 30,411 19,197 24,448 13,610 10,196

Total Expenditure 22,731 18,042 15,698 9,832 6,885

Profit Before Tax 7,680 1,155 8,750 3,778 3,311

Tax 2,842 1,048 2,760 1,338 1,068

Profit After Tax 4,838 107 5,990 2,440 2,243

Add: Extraordinary Item - 4,001 - -

Add: Share of Profit in Associates - - - 81 28

Less: Pre-acquisition Profit on increase in stake in subsidiary

- 24 - - -

Less: Minority Interest 220 82 124 - -

Net Profit after Tax 4,618 4,002 5,866 2,521 2,271

Equity 2,253 2,234 2,090 2,090 1,522

Reserves 36,920 30,664 23,159 19,975 3,333

Net Worth 39,173 32,898 25,249 22,065 4,855

Face Value 1 1 1 1 10

Book Value 17.39 14.73 12.08 10.56 3.19

EPS 2.06 - 2.81 1.63 14.92

Dividend 75% 50% 70% 40% 40%

Return on Networth 12% 12% 23% 11% 47%

FIVE YEARS’ REVIEW


FIVE YEARS’ REVIEW


FROM THE CHAIRMAN’S DESKIt gives me great pleasure to welcome you all to this 16th Annual General Meeting. We entered the fiscal 2009-10 after a year of unprecedented challenges in the economy and in the industry in which your Company operates. The steps taken in this period such as expanding the branch network and investments in technology will prove fruitful as the economy recovers. We are already seeing evidence of the same in the substantial increase in our revenue and profit for the past fiscal. With the recovery of the stock market, our major revenue streams showed a significant increase in revenue. Our financial results for the year reflect this - consolidated total income increased by 58% from Rs.191.97 crore to Rs.304.11 crore and profit after tax jumped to Rs.46.18 crore as compared to last year when our numbers were very modest.

The Board is well aware that dividend is an extremely important part of shareholders’ return and income. In line with the Company’s consistent dividend policy of balancing the objectives of appropriately rewarding shareholders, retaining capital to support future growth and taking into account the Company’s current cash position, your Directors have recommended a dividend of 75 paise per equity share of rupee one for the year 2009-10, an increase of 50% over the last year’s dividend rate. Advances in information technology have increasingly impacted the financial sector and changed the way financial business is being conducted. On the occasion of the 10th anniversary of the launch of Internet Trading in India by the Company, a new advanced online investment platform – FLIP(Financial Investment Platform) – was introduced that incorporates a full-fledged Order Management System with built-in multi-level security risk management and real-time streaming market data. Another initiative was the launch of FLIP-ME(FLIP-Mobile Edition) that delivers real-time stock prices and market information (Market Watch) to the GPRS enabled mobile phones of clients.As the range of financial instruments increases, so does the need for investors to have access to informed and trustworthy financial advisors who can help them make appropriate investment decisions. To meet this growing need we are training our workforce to acquire the requisite skills. Our Advisory Services department has been conducting structured training sessions and exams in a phased manner. Further, to efficiently cater to the needs of investors across our branches in different States, employees with multi-lingual skills are being suitably positioned.We strongly believe that concentrating on the core business of our Company is the best strategy to promote growth and generate value for shareholders as has been demonstrated by the Company so far. We continue to follow this strategy and the strength of Geojit BNP Paribas brand should help in achieving a critical mass which will deliver significant cost and scale advantages. One of the key drivers for the consistently good Indian GDP growth rate, which averaged around nine percent in the five year period 2004-08, 6.70% in 2008-09 and 7.40% in 2009-10 has been the high savings rate in the country which is in the range of 35-36% of GDP. In the context of a very small percentage of household savings being invested in the stock market and a sizeable section of population still remaining outside the banking and financial sector, there is enormous potential for retail financial services industry in our country. To create awareness about investing in stock market your Company regularly conducts Investor Education Programmes and to deepen the penetration and reach we open new offices in different regions including semi-urban and semi-rural areas and today we have established our footprints in over 500 locations across the country. We stand committed to expand our reach and provide efficient and investor friendly service to our growing family of over 5 lakh clients and to each one of them and to our esteemed share holders I convey our gratitude and look forward to their continued support.Wishing you all the very best,

Yours Sincerely,

A. P. Kurian


NOTICENOTICE is hereby given that the 16th Annual General Meeting of the Company will be held on Monday, the 12th day of July, 2010 at 4.00 p.m. at Hotel International, Veekshanam Road, Kochi-682035 to transact the following business:

ORDINARY BUSINESS

1. To receive, consider, approve and adopt the audited Balance Sheet as at 31 March 2010 and Profit and Loss Account for the year ended 31 March 2010 together with the Directors’ Report and Auditors’ Report thereon.

2. To declare dividend on equity shares for the year 2009-10

3. To appoint a Director in place of Mr. Punnoose George, who retires by rotation and being eligible, offers himself for reappointment.

4. To appoint a Director in place of Mr. Rakesh Jhunjhunwala, who retires by rotation and being eligible, offers himself for reappointment.

5. To appoint Auditors to hold office from the conclusion of this Meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration and in this connection, to consider and, if thought fit, to pass with or without modification, the following resolution as an ORDINARY RESOLUTION:

“Resolved that M/s Deloitte Haskins & Sells, Chartered Accountants, 1st Floor, Wilmont Park Business Centre,Warriam Road, Kochi – 682016, (ICAI Registration No.008072S) be and are hereby reappointed as Auditors of the Company to hold office from the conclusion of this Meeting until the conclusion of the next Annual General Meeting of the Company at a remuneration to be determined by the Board.”

The present Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, 1st Floor, Wilmont Park Business Centre, Warriam Road, Kochi – 682016, (ICAI Registration No.008072S) retire and have expressed their willingness to continue in office. Certificate has been obtained from them that reappointment, if made, will be in accordance with the limits specified in Section 224(1B) of the Companies Act, 1956.

SPECIAL BUSINESS

6. To consider and, if thought fit, to pass, with or without modifications, the following resolution as a SPECIAL RESOLUTION:

“Resolved that pursuant to Sections 198, 269, 317, Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 and subject to such approvals as may be necessary, consent of the Company be and is hereby accorded for reappointment of Mr. C. J. George as Managing Director of the Company for a period of five years w.e.f. 24th November 2009 on the following terms and conditions –

I. Powers and duties

The Managing Director shall exercise and perform such powers and duties as the Board of Directors of the Company shall from time to time determine and subject to any direction and restrictions, from time to time, given and imposed by the Board of Directors and he shall have the general control, management and superintendence of the business of the Company with power to appoint and dismiss employees and to enter into contract on behalf of the Company in the ordinary course of business and to do and perform all other acts and things which in the ordinary course of business he may consider necessary and proper in the interest of the Company.

II. Remuneration

a) Basic Salary: Rs.3 lakh per month with an annual increment of 10%.

b) Accommodation/House Rent Allowance: House Rent Allowance of Rs.18,000/- per month with cost of furnishing up to Rs.3 lakh during the contract period with provision to take over the furniture, fittings, appliances etc. at the time of leaving the Company at the then book value in the Company’s books (or) Free furnished Company accommodation, the cost of which to the Company not exceeding 50% of salary.

c) Other benefits, allowances and perquisites: In addition to the above, the Managing Director shall be entitled to the following benefits, allowances and perquisites as may be decided by the Board from time to time-(i)Annual Leave Travel Allowance (ii) Annual Medical Allowance (iii) Reimbursement of expenses towards house utilities such as Telecommunications, gas, electricity, water, housing society charges, servant’s salary and maintenance of furnishings in the house (iv) Annual Premium towards Mediclaim Policy, Personal Accident Insurance, Overseas Travel Insurance and Group Gratuity Scheme (v) Meals Allowance/Sodexho (vi) Company


Car and Driver for Official and personal use subject to tax as per Income Tax Rules (vii) Club fees of maximum 2 clubs not including admission and life membership fees (viii) Telephone at residence and (ix) Provident Fund, leave and leave encashment as applicable to all other employees.

d) Commission: 1.5% of the net profits of the Company before tax as computed in the manner laid down in Section 309(5) of the Companies Act, 1956.

III. Other terms and conditions:

a) The remuneration, perquisites, benefits and allowances mentioned aforesaid shall be paid to the Managing Director in accordance with the provisions of the Companies Act, 1956, with liberty to the Board of Directors to alter and vary the terms and conditions so as not to exceed the limits specified in the Companies Act, 1956 as may be agreed to between the Board and the Managing Director.

b) If in any financial year during the term of office of the Managing Director, the Company has inadequate profits as computed under the applicable provisions of the Companies Act,1956, he shall be entitled to receive the remuneration specified above as minimum remuneration as provided under the Companies Act,1956.”

7. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a SPECIAL RESOLUTION:

“Resolved that pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956, (including any statutory modifications or re-enactments thereof), the provision of Clause 6.1 and other applicable provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time to time, and in accordance with the provisions of the Memorandum and Articles of Association of the Company and the regulations/guidelines prescribed by the Securities & Exchange Board of India or any other relevant authority, from time to time to the extent applicable and further subject to such other approvals as may be necessary and such conditions and modifications as may be considered necessary by the Board of Directors of the Company (hereinafter referred to as the “Board” which expression shall also include a Committee thereof), or as may be prescribed or imposed while granting such approvals which may be agreed to or accepted by the Board in its absolute discretion, the consent of the Company be and is hereby accorded to the Board to create, offer, issue, allocate or allot, in one or more tranches, at the sole discretion of the Board, to such persons who are in the permanent employment of the Company, whether present or future, in India or abroad, such number of equity shares of the Company not exceeding 1,12,00,000 (one crore twelve lakh only) equity shares (which shall include the number of stock options to be granted to selected employees of subsidiaries) under the “Employee Stock Option Plan 2010” (hereinafter referred to as the “ESOP 2010” or “Scheme” or “Plan”) , as the Board may deem fit, on such terms and at such price as may be fixed and determined by the Board in accordance with the applicable guidelines and provisions of law and on such other terms and conditions and at such time or times as the Board in its absolute discretion and in the best interest of the Company deem fit.

Resolved further that the equity shares so issued, allocated or allotted shall rank pari passu in all respects with the existing equity shares of the Company, save and except that such equity shares which may be with or without voting rights, if permitted by law and shall carry the right to receive the full dividend from the date of allotment, as may be decided by the Board.

Resolved further that the limit of the reserved shares be increased and/or adjusted in the future in the event of any bonus or stock-splits and simultaneously the price of the shares be adjusted proportionately and the entitlements of the option-holders be increased proportionately.

Resolved further that the Board be and is hereby authorised to amend the scheme as to its terms and conditions including issue of additional options at the adjusted price in order to give effect to the bonus shares or stock splits to be issued, etc., in the best interest of the Company and the employees.

Resolved further that for the purpose of giving effect to this resolution, the Board be and is hereby authorised to delegate all or any of the powers herein conferred to any Committee of the Board to do all such acts, deeds, matters as it may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard to the implementation of the ESOP Plan and further to do all such acts, deeds, matters and things and to finalise and execute all documents and writings as may be necessary, proper, desirable or expedient as it may deem fit and to give such directions and/or instructions as it may from time to time decide and to accept and give effect to such modifications, changes, variations, alterations, deletions, additions as regards the terms and conditions of the ESOP Plan, as the Board or a Committee may suo motto decide in its absolute discretion in the best interest of the Company without requiring any further approval of the Members.”


8. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a SPECIAL RESOLUTION:

“Resolved that pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956, (including any statutory modifications or re-enactments thereof), the provision of Clause 6.3 (a) and other applicable provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time to time, and in accordance with the provisions of the Memorandum and Articles of Association of the Company and the regulations/guidelines prescribed by the Securities & Exchange Board of India or any other relevant authority, from time to time to the extent applicable and further subject to such other approvals as may be necessary and such conditions and modifications as may be considered necessary by the Board of Directors of the Company (hereinafter referred to as the “Board” which expression shall also include a Committee thereof), or as may be prescribed or imposed while granting such approvals which may be agreed to or accepted by the Board in its absolute discretion, the consent of the Company be and is hereby accorded to the Board to create, offer, issue, allocate or allot, in one or more tranches, at the sole discretion of the Board, to such persons who are in the permanent employment of the subsidiaries company(ies), whether present or future, in India or abroad, such number of equity shares of the Company not exceeding 1,12,00,000 (one crore twelve lakh only) equity shares (which shall include the number of such options to be granted to selected employees of the parent company) under the “Employee Stock Option Plan 2010” (hereinafter referred to as the “ESOP 2010” or “Scheme” or “Plan”), as the Board may deem fit, on such terms and at such price as may be fixed and determined by the Board in accordance with the applicable guidelines and provisions of law and on such other terms and conditions and at such time or times as the Board in its absolute discretion and in the best interest of the Company deem fit.

Resolved further that the equity shares so issued, allocated or allotted shall rank pari passu in all respects with the existing equity shares of the Company, save and except that such equity shares which may be with or without voting rights, if permitted by law and shall carry the right to receive the full dividend from the date of allotment, as may be decided by the Board.

Resolved further that the limit of the reserved shares be increased and/or adjusted in the future in the event of any bonus or stock-splits and simultaneously the price of the shares be adjusted proportionately and the entitlements of the option-holders be increased proportionately.

Resolved further that the Board be and is hereby authorised to amend the scheme as to its terms and conditions including issue of additional options at the adjusted price in order to give effect to the bonus shares or stock splits to be issued, etc., in the best interest of the Company and the employees.

Resolved further that for the purpose of giving effect to this resolution, the Board be and is hereby authorised to delegate all or any of the powers herein conferred to any Committee of the Board to do all such acts, deeds, matters as it may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard to the implementation of the ESOP Plan and further to do all such acts, deeds, matters and things and to finalise and execute all documents and writings as may be necessary, proper, desirable or expedient as it may deem fit and to give such directions and/or instructions as it may from time to time decide and to accept and give effect to such modifications, changes, variations, alterations, deletions, additions as regards the terms and conditions of the ESOP Plan, as the Board or a Committee may suo motto decide in its absolute discretion in the best interest of the Company without requiring any further approval of the Members.”

By Order of the Board of Directors

Sd/-

Place: Kochi T. JayarajDate : 28th May, 2010 Company Secretary


NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXY FORM MUST BE LODGED AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN 48 HRS BEFORE THE COMMENCEMENT OF THE MEETING.

2. Corporate members intending to send their authorised representative to attend the Meeting are requested to ensure that the authorised representative carries a certified copy of the Board Resolution, Power of Attorney or such other valid authorisations, authorising them to attend and vote on their behalf at the Meeting.

3. The Register of Members of the Company will remain closed from 10th July 2010 to 12th July 2010 (both days inclusive) under Section 154 of the Companies Act, 1956 for the purpose of payment of dividend.

4. Dividend on equity shares as recommended by the Directors for the year ended 31 March 2010, when declared at the Meeting, will be paid on or before 10th August 2010:

(i) to those members whose names appear on the Company’s Register of Members as on 12th July 2010, after giving effect to all valid share transfers in physical form lodged with the Registrar and Share Transfer Agent of the Company on or before 9th July 2010.

(ii) In respect of shares held in electronic form, to those ‘deemed members’ whose names appear in the statements of beneficial ownership furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) as at the closing hours of 9th July 2010.

The Company will use the bank account details furnished by the Depositories for distributing the dividends to the Members holding shares in the electronic form through Electronic Clearing Services (ECS) facility.

5. Members are requested to intimate change in their bank account details, address, etc, to the Registrar & Share Transfer Agents M/s. S.K.D.C. Consultants Limited, Kanapathy Towers, 3rd Floor,1391/A-1, Sathy Road, Ganapathy, Coimbatore- 641006 (Email: [email protected]), in respect of shares held in physical form and to their respective Depository Participants, if the shares are held in electronic form.

6. Members are requested to bring their copy of Annual Report and Attendance Slip duly completed when attending the Meeting.

7. Members desirous of getting any information on the Annual Accounts, at the Annual General Meeting, are requested to write to the Company at least 10 days in advance, so as to enable the Company to keep the information ready.

8. The Company has transferred the unclaimed dividend declared for the Financial Year 2001-02 to “The Investor Education and Protection Fund”. All members who have either not received or have not yet encashed their dividend warrants for the Financial Year 2002-03 are requested to write to the Company’s Registrar and Share Transfer Agents at the address mentioned above, for obtaining duplicate dividend warrant without any delay.

9. The Certificate from Auditors of the Company as stipulated under SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 for ‘Employees Stock Option Plan 2005’, ‘Employees Stock Option Plan 2005 (Reissue-I) and ‘ Employees Stock Option Plan 2007 for Key Employees’ will be available for inspection at the Annual General Meeting.

10. Brief resume of Directors proposed to be appointed/reappointed are enclosed as Annexure A to this Notice as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges.

ANNEXURE TO NOTICE

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

Item No. 6

Mr. C. J. George is the Managing Director of the Company since November 1994 and was reappointed from time to time. His current tenure as Managing Director expired on 23rd November 2009. The Board of Directors in their Meeting held on 12th October 2009 has approved the reappointment of Mr. C. J. George as Managing Director of the Company for a further period of five years w.e.f. 24th November 2009, subject to necessary approvals. The Compensation Committee has also approved the terms of payment of remuneration.

Your directors recommend the resolution for approval of the members.

Except Mr. C.J. George, no other director is interested or concerned in this resolution.


Item No. 7 & 8

The Company has formulated an Employee Stock Option Plan (ESOP) in accordance with the SEBI (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines, 1999 to enable aligning the interests of the employees with those of the Company and its members and to create a sense of ownership among them. ESOP will also act as an effective tool to attract, reward, motivate and retain the best talent in the industry.

It is proposed to institute an Employees Stock Option Plan, which would be titled as ‘ESOP 2010’ to grant a maximum of 1,12,00,000 equity shares of Re.1 each, representing 4.99% of the outstanding paid up equity share capital of the Company, to employees of the Company and/or its subsidiaries.

The terms and conditions under which the stock options will be issued under the ESOP 2010 to the eligible employees are set out below:

i. Total No. of Options proposed to be covered under the Plan. A maximum of 1,12,00,000 Stock Options to existing or future employees of the Company or its subsidiary(ies).

One Option would entitle the holder of the options a right to apply for one equity share of face value of Re.1/-. In case of bonus issue and split of shares, the aggregate number of stock options would increase in the proportion of bonus issue and split of shares.

The options shall not be pledged, hypothecated, mortgaged or otherwise alienated in any other manner. The options which lapse/expire or are forfeited under the Scheme shall not be resissued.

ii. Grant date The date of the Meeting of the Board/Committee approving the grant of options. iii. Eligibility Persons who are in the permanent employment of the Company and its subsidiary Company(ies), if any and at any

time, in such grade and with such experience/ association with the Company, as may be decided by the Board/Committee.

These persons are referred herein collectively as the “Eligible Employees”. iv. Persons not eligible for grant of options An employee who is a promoter or belongs to the promoter group or a director who either by himself or through his

relative or through any body corporate, directly or indirectly holds more than 2% of the outstanding equity shares of the Company at the time of granting of the option shall not be eligible to participate in the ESOP.

v. Pricing The equity shares would be issued at a market price, which would be the latest available closing price on the Stock

Exchange, which records highest trading volumes in the Company’s equity shares on the date prior to the date of the Meeting of the Board/Committee at which options are granted or at such price as the Board/Committee may determine at the time of grant of option(s) in accordance with the applicable guidelines.

vi. Appraisal Process The Board/Committee shall determine the eligibility criteria for the eligible employees based on their evaluation on

various parameters, such as length of service, performance, criticality, merit, leadership qualities, future potential and such other factors as may be deemed appropriate by it.

vii. Vesting, requirements of vesting and maximum period of vesting The minimum vesting period shall be 2 years and the maximum vesting period shall be 5 years from the date of

grant. The options may vest in tranches subject to the terms and conditions as may be stipulated by the Board/Committee,

which may include satisfactory performance of the employees and their continued employment with the Company, as the case may be.

If the employee voluntarily terminates employment with the Company or retires from the services of the Company, the options to the extent not vested shall lapse/expire and be forfeited forthwith.

In the event of the death of the employee while in employment, all the options granted to him till such date shall vest in the legal heirs or nominees of the deceased employee. In case the employee suffers a permanent incapacity while in employment, all the options granted to him as on the date of permanent incapacitation, shall vest in him on that day.


viii. Exercise Period and process of exercise

The exercise period will commence from the date of vesting. The options granted could be exercised within a maximum period of 5 years from the date of grant.

The options would be exercisable by submitting the requisite application form/exercise notice to the Company or such other person as the Company may prescribe, subject to conditions for payment of exercise price and taxes, etc, in the manner prescribed by the Board or Committee.

ix. Maximum number of options to be issued per employee and in the aggregate

The maximum number of options granted to any eligible employee in a year will not exceed 1% of the issued equity shares of the Company at the time of granting of the options. The aggregate of all such grants shall not exceed 1,12,00,000 options.

x. Disclosure and Accounting policies

The Company shall comply with the disclosure and accounting policies, as prescribed by Securities and Exchange Board of India and any other appropriate authority from time to time.

xi. Method of valuation

The Company will follow intrinsic value method to calculate the employee compensation cost arising due to grant of stock options. The difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognised if it had used the fair value of the options shall be disclosed in the Directors’ Report and also the impact of this difference on profits and EPS of the Company shall also be disclosed in the Directors’ Report.

The Board of Directors/Committee shall have the absolute authority to vary or modify the terms of ESOP in accordance with the regulations and guidelines prescribed by SEBI or regulations that may be issued by any appropriate authority, from time to time, unless such variation, modification or alteration is detrimental to the interests of the employees/Directors.

Your directors recommend the resolution for approval of the members.

None of the Directors of the Company are deemed to be concerned or interested in the resolutions set out as item No. 7 & 8.

By Order of the Board of Directors

Sd/-

Place: Kochi T. JayarajDate : 28th May, 2010 Company Secretary


Name of the Director Punnoose George Rakesh Jhunjhunwala

Date of Birth 26.05.1959 05.07.1960

Nationality Indian Indian

Date of appointment 29.04.1995 28.03.2005

Qualifications Bsc, Engg, L. L. M B.Com, A.C.A.

Shareholding in Geojit BNP Paribas Financial Services Ltd.

91,20,000 1,80,00,000

Expertise in specific functional area

Mr. Punnoose George, is an industrialist of repute with interest in manufacturing industries, plantations and educational institutions. He is the Executive Director of Kottukulam Group, Kottayam. He was a member of Cochin Stock Exchange Limited.

Mr. Punnose George, a graduate in Engineering and an LLM holder, is on the Board of Geojit since April 1995.

Mr. Rakesh Jhunjhunwala, a qualified Chartered Accountant is a well known investor in the Indian Capital Market. He has extensive experience and expertise in analysing and identifying potential investment opportunities in the Indian Equity Market. He has also been an advisor to institutional investors and the well known speaker in Capital Market related topics. He is a Director of number of publically listed as well as unlisted companies.

Chairman/Director of other Indian Companies

(a) Kottukulam Engineers Pvt. Ltd.

(b) Unity Realtors Pvt. Ltd.

(c) Geojit Technologies Pvt. Ltd.

(a) Aptech Limited

(b) Autoline Industries Ltd.

(c) Inventurus Knowledge Solutions Pvt. Ltd.

(d) Maneesh Pharmaceuticals Ltd.

(e) Metro Shoes Ltd.

(f) Mid Day Multimedia Ltd.

(g) Future Ventures India Limited

(h) Nagarjuna Construction Comp any Limited

(i) Ohm Educom Foundation Pvt. Ltd.

(j) Prime Focus Limited

(k) Viceroy Hotels Limited

(l) Hungama Digital Media Entertainment Pvt Ltd. (Formely known as Virtual Marketing (India) Pvt Ltd.)

(m) A 2 Z Maintenance & Engineering Services Pvt. Ltd.

Chairman/Member of Committees of the Boards of other Indian Companies of which he is a Director

Nil Shareholders/Investors Grievance Committee Member – Mid Day Multimedia Limited

Details of the Directors seeking reappointment at the Annual General Meeting as required under Clause 49 of the Listing Agreement.


DIRECTORS’ REPORTDear Members,

Your Directors have pleasure in presenting the 16th Annual Report of your Company for the financial year ended 31 March 2010.

FINANCIAL HIGHLIGHTS (Rs. in crore)

ParticularsStandalone Consolidated

2009-10 2008-09 Change 2009-10 2008-09 Change

Total Income 288.05 159.42 80.6% 304.11 191.97 58.4%

Exceptional / Extra-Ordinary income 0.00 0.00 0.00 40.00

Profit Before Tax 81.72 20.26 303.3% 76.80 51.56 48.9%

Provision for Tax 24.56 5.74 327.8% 28.43 10.48 171.2%

Profit After Tax 57.15 14.52 293.5% 46.18 40.01 15.4%

Balance brought forward 54.96 56.47

Profit available for appropriation 112.11 70.99

Appropriations : Transfer to General Reserve 5.72 3.00

Dividend (Including Dividend Tax) 17.89 13.02

Balance carried to Balance Sheet 88.47 54.96

REVIEW OF PERFORMANCEOn a standalone basis, your Company has achieved an impressive growth of 80.6% in total income from Rs.159.42 crore to Rs.288.05 crore for the financial year ended 31 March 2010. The Company recorded an operating profit of Rs.81.72 crore and a net profit after tax of Rs.57.15 crore. The profit after tax increased by 294%. Basic earnings per share work out to Rs.2.55 compared to Rs.0.68 recorded in the previous year.

On a consolidated basis your company earned a total income of Rs.304.11 crore for the financial year, an increase of 58% over the previous year’s figures of Rs.191.97 crore, an operating profit of Rs.76.80 crore and a net profit of Rs.46.18 crore.

A detailed analysis of the performance is given in the Management Discussion and Analysis Report appended hereto.

DIVIDEND

Your Directors are pleased to recommend a dividend of 75 paise per share of Re.1 each for the financial year ended 31 March 2010 taking into account the performance of the Company. The payment of dividend together with tax thereon will absorb Rs.19.69 crore.

INCREASE IN SHARE CAPITAL

During the year under review, the paid-up share capital of the Company increased from Rs.22.34 crore to Rs.22.52 crore, consequent to the issue of 18,41,761 equity shares to employees upon exercise of stock options under the Employee Stock Option Plans of the Company.

DIRECTORS

KSIDC Limited appointed Mr.Alkeshkuamr Sharma as its Nominee on the Board of the Company replacing Mr. Manoj Joshi w.e.f. 20 July 2009.The Board of Directors place on record its sincere appreciation and gratitude for the valuable contribution and guidance received from Mr. Manoj Joshi during his tenure as a member of the Board.

In accordance with Article 80 of the Articles of Association of the Company, Mr.Punnoose George and Mr.Rakesh Jhunjhunwala, Non-executive Directors, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.


The term of appointment of Mr. C.J.George as Managing Director of the Company expired on 23.11.2009.The Board of Directors of the Company has re-appointed Mr. C.J.George for a further period of 5 years w.e.f. 24.11.2009 on terms and conditions, details of which are provided in the Notice of Annual General Meeting.

Brief details of Directors proposed to be appointed and re-appointed are given in the Notice of Annual General Meeting.

CONSOLIDATED RESULTS

The Consolidated Financial Results represent those of Geojit BNP Paribas Financial Services Limited, its subsidiaries i.e., Geojit Investment Services Limited (100% held), Geojit Financial Management Services Private Limited (100% held), Geojit Credits Private Limited (65.03% held), its step down subsidiaries i.e, Geojit Technologies Private Limited (65% held), Geojit Financial Distribution Private Limited (100%), Sigma Systems International FZ LLC, Dubai (100% held) and its joint ventures i.e., BNP Paribas Securities India Private Limited (49.99% held), Barjeel Geojit Securities L.L.C., Dubai (30%held) and Aloula Geojit Brokerage Company, Saudi Arabia(28% held) prepared in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India.

SUBSIDIARIES

Ministry of Corporate Affairs granted approval under Section 212(8) of the Companies Act, 1956 exempting the Company from attaching copies of the Balance Sheet, Profit and Loss Account, Reports of the Board of Directors and Auditors of Subsidiaries as specified under Section 212(1) of the Companies Act, 1956. Accordingly these documents are not attached to the Balance Sheet. However summarised financial information of the subsidiaries is included in this Annual Report. Full annual report including financial information of the subsidiaries is published on the website of the Company and will be available upon request by any member interested in obtaining the same. Geojit Investment Services Limited recorded revenue of Rs.5.60 crore and a profit after tax of Rs.3.17 crore. Geojit Credits Private Limited recorded total revenue of Rs.2.85 crore and profit after tax of Rs.1.60 crore during the year. The revenue of Geojit Technologies Private Limited, a step down subsidiary engaged in software development and services, grew by 69% to Rs.11.24 crore from Rs.6.66 crore in the previous year. The Company recorded a net profit after tax of Rs.4.67 crore during the year, an increase of 135%. Another step down subsidiary viz, Geojit Financial Distribution Private Limited engaged in insurance referrals has recorded a total income of Rs.218.19 lakh and net profit after tax of Rs.74.63 lakh. Geojit Financial Management Services Private Limited, another subsidiary recorded a profit of Rs.43,357/- compared to a loss of Rs.2.31 lakh in the previous year.Considering the insignificant business activity of Geojit Investment Services Limited, the Board of Directors of the company at its Meeting held on 13.05.2009, proposed a Scheme of Amalgamation of Geojit Investment Services Limited with Geojit BNP Paribas Financial Services Limited pursuant to Section 394 of the Companies Act, 1956. Since Geojit Investment Services Limited was engaged in commodities futures brokerage as a member of relevant exchanges, Forward Markets Commission’s clearance is required for the proposed amalgamation. Such clearance is awaited.

JOINT VENTURES

Barjeel Geojit Securities L.L.C., a joint venture in Dubai with Al Saud Group in which Geojit holds 30% recorded a net profit of Rs.7.46 crore (Previous year Rs.2.05 crore) of which Geojit’s share is Rs.2.23 crore.

Aloula Geojit Brokerage Company, the joint venture in Saudi Arabia with Al Johar Group in which Geojit holds 28%, reported a net loss of Rs.11.19 crore (Previous year Rs.16.67 crore) of which Geojit’s share is Rs.3.13 crore.

BNP Paribas Securities India Private Limited, the joint venture in Mumbai with BNP Paribas for institutional broking in which Geojit holds 49.99%, recorded a net loss of Rs.14.84 crore (Previous year Rs.27.32 crore) of which Geojit’s share is Rs.7.42 crore.

FIXED DEPOSITS

Your company has not accepted any fixed deposits from the public under Section 58(A) of the Companies Act, 1956 and as such, no amount of principal or interest is outstanding as of the balance sheet date.

HUMAN RESOURCES

As a service company, the Company’s operations are heavily dependent on qualified and competent personnel. As on 31 March 2010, the Company had a total head count of 2739. Your Company takes significant effort in training all employees at various levels and conducted 1703 training programmes during the year, which covered 13959 participants.


EMPLOYEE STOCK OPTION PLAN

During the year some employees of the Company have exercised part of their stock options granted under the Employees Stock Option Plan 2005 and the Compensation Committee of the Board of Directors of the Company has allotted total 18,41,761 equity shares on various dates to those who exercised the stock options at various exercise prices in accordance with the terms and conditions of the ESOP.

Details of the equity shares issued under ESOP, as also the disclosures in compliance with clause 12 of the SEBI (Employees Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

During the period under report, the Board of Directors of the Company approved a proposal to issue 1,12,00,000 (one crore twelve lakh only) new stock options under Employee Stock Option Plan 2010 (ESOP 2010). The proposed issue will represent 4.99% of the paid up share capital of the Company. Necessary resolution along with Explanatory Statement in this regard is included in the notice of AGM for approval of members.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. However, in pursuance of Section 219(1)(b)(iv) of the Companies Act, 1956 this Report is being sent to all the members of the Company excluding the aforesaid information and the said particulars are made available at the Registered Office of the Company. The members interested in obtaining information under Section 217(2A) may write to the company secretary at the Registered Office of the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirm having:

i. followed in preparation of the Annual Accounts, the applicable standards with proper explanation relating to material departures, where applicable;

ii. selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and the profit of your company for that period;

iii. taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

iv. prepared the Annual Accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has nothing to report in respect of information on conservation of energy and technology absorption as required under Section 217(1) of the Companies Act, 1956 read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 since the Company is not engaged in manufacturing or processing business. The details regarding foreign exchange earnings and outgo are given as Annexure II to this report.

CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance norms as stipulated under the provisions of the Listing Agreement entered into with the Stock Exchanges. A detailed Report on Corporate Governance is given as Annexure III to this Report. A certificate of Statutory Auditor confirming compliance of the Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Company, through its subsidiaries and joint ventures, now form an integrated financial services group having business interests in retail and institutional stock broking, wealth management, financing against shares and commodities, margin funding, property services, distribution of a variety of investment products, etc which caters to the needs of retail investors, corporates and institutions, high net worth individuals, etc. in India and overseas. A detailed review of operations, performance and future outlook of the Company is given separately under the head Management Discussion and Analysis Report appended hereto.


AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, 1st Floor, Wilmont Park Business Centre,Warriam Road, Kochi – 682016, (ICAI Registration No.008072S) were appointed as statutory auditors of your company to conduct the audit of accounts for the year ended 31 March 2010. Their term of appointment expires at the conclusion of the forthcoming Annual General Meeting. Your Directors have proposed them for reappointment at the forthcoming AGM.

ACKNOWLEDGEMENTS

Your Directors wish to acknowledge the valuable guidance and assistance received from Securities and Exchange Board of India, Stock Exchanges & other Regulatory authorities, BNP Paribas, KSIDC, our clients and business partners. We look forward to receiving their continued support and encouragement. The Board of Directors wishes to extend their thanks and appreciation and express their gratitude for the continuing commitment and dedication of employees at all levels. The Directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company.

For and on behalf of the Board of Directors

Sd/-

Place : Kochi A.P. Kurian Date : 28th May, 2010 Chairman


ANNEXURES TO THE DIRECTORS’ REPORT 2010

Annexure I

Disclosure pursuant to the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of Employee Stock Option Plans.

Sl.No. ParticularsESOP 2005

(Granted during 2005-06)

ESOP 2005 (Re-issue–I)


ESOP 2007 for Key Employees


1 Options granted 69,89,400 options representing equal number of shares.

9,50,500 options representing equal number of shares.

25,00,000 options representing equal number of shares.

2 The pricing formula. As per Note 1 As per Note 2 As per Note 33 Options vested up to 31.03.2010 3323390* 104546* Nil4 Options exercised up to 31.03.2010 2304250 65991 Nil5 The total number of shares arising as

a result of exercise of option.2304250 65991 Nil

6 Options lapsed (as at 31 March 2010) 1361760 387783 Nil7 Variation of terms of options. The Compensation

Committee made the following amendments with the approval of Members wherever required –

Lock-in period was • removed.Adjusted the • number and price of options to give effect to the sub-division of face value of shares.Provided for the • reissue of lapsed stock options at such terms and conditions as may be deemed fit by the Board of Directors.

The Compensation Committee re-priced the stock options on 11.04.2009 with the approval of Members. Now the options were granted at a Market Price of Rs.25.50 as per SEBI Guidelines while options were granted earlier at a discount on the Market Price of Rs.66.55 per share.

The Compensation Committee re-priced the stock options on 11.04.2009 with the approval of Members. Now the options were granted at a Market Price of Rs.25.50 as per SEBI Guidelines while options were granted earlier at a discount on the Market Price of Rs.66.55 per share.

8 Money realised by exercise of options.

Rs.412.96 lakh Rs.12.23 lakh Nil

9 Total number of options in force as at 31.03.2010.

3323390 496726 25,00,000

10 Employee wise details of options granted to:-(i) senior managerial personnel

including Directors.

As per Note 4 As per Note 4 As per Note 4

(ii) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year.

Nil Nil As per Note 4

(iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

Nil Nil Nil


11 Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 – Earnings per share.

Rs.2.53

12 (i) Method of calculation of employee compensation cost.

The Company has calculated the employee compensation cost using the intrinsic value method of accounting to account for options issued.

(ii) Difference between the employee compensation cost so computed at (i) above and the employee compensation cost that shall have been recognised if it had used the fair value of the options.

Rs.65.49 lakh Rs.93.99 lakh Rs.260.24 lakh

(iii) The impact of this difference on Profit After Tax as reported Rs.5715.43 lakh profits and on EPS of the Company. Add Intrinsic Value Compensation Cost Rs.41.23 lakh

Less Fair value Compensation Cost Rs.460.95 lakh(Black Scholes Model)Adjusted Profit After Tax Rs.5295.69 lakhEarnings per share (Basic) As reported Rs.Rs.2.55As adjusted Rs.Rs.2.36Earnings per share (Diluted) As reported Rs.Rs.2.53As adjusted Rs.Rs.2.34

13 (i) weighted average exercise price For Options issued to: For Options issued to: of options (As on 31.03.2010) Directors - Rs.18.86 Directors - Rs.25.50 Rs.25.50

Managers & above

- Rs.17.75 Sr. Managers & above

- Rs.25.50

Other employees

- Rs.17.94 Other employees

- Rs.25.50

(ii) weighted average fair values of options (As on 31.03.2010)

For Options issued to : For Options issued to :

Directors - Rs.17.23 Directors - Rs.56.56 Rs.61.67Managers & above

- Rs.17.27 Sr. Managers & above

- Rs.56.60

Other employees

- Rs.17.30 Other employees

- Rs.56.61

14 Fair value of options based on Black Scholes methodology – Assumptions used :

7.00% 7.00% 7.00%(i) risk –free interest rate(ii) expected life of options 2 to 4 years 2 to 4 years 4 to 7 years(iii) expected volatility 199% 170% 170%(iv) expected dividends (dividend

yield)1.76% 0.60% 0.60%

(v) Closing market price of share on the date of option grant.

Rs.19.86 Rs.66.55 Rs.66.55

* Represents vested portion of total options in force as on 31.03.2010


Note 1: ESOP 2005 – Eligibility criteria and Pricing formula(a) Eligibility Criteria and No. of options:Independent Directors holding less than 10% of the equity and Employees of the Company and its subsidiaries as on 31st December 2005

Criteria No. of options

1. All employees who have put in not less than 2 years as on 31-12-2005

Option for 2000 shares for each year of completed service

2. All employees in Salary Group I (Managers) and above irrespective of their service duration

Option for number of shares equal to 10% of their annual direct salary (excluding incentives) rounded off to the nearest hundered

3. Eligible Directors Option for 60000 shares each

(b) The pricing formula:

The exercise price is determined on the basis of the market price prior to the date of the meeting of the Board of Directors granting the options. Discount on market price to be offered, subject to the price not going below the face value of Re.1, as below:

For Criteria 1:Managers & above - 20 paise for each year of completed serviceJr. Executives to AM - 40 paise for each year of completed serviceOffice Assistants & others - 50 paise for each year of completed service

For Criteria 2 & 3: Directors - Re.1.00GM & above - Re.1.50SM to AGM - Re.2.00Managers - Re.2.50

Note 2: Pricing formula for ESOP 2005 (Reissue – I)The discount on market price of Rs.66.55 offered at the time of grant of options in December 2007 are as follows:

Managerial cadre Discount offered on the Market PriceAsst. Managers & Managers - Rs.1.25 Sr. Managers to AGM - Re.1.00GM and above - Re.0.75Directors - Re.0.50

Subsequently, on 11.04.2009 the Compensation Committee re-priced the outstanding stock options as on 31.03.2009 at the Market Price of Rs.25.50 determined as per SEBI Guidelines. Note 3: Pricing formula for ESOP 2007 for Key Employees10% discount was offered on the Market Price of Rs.66.55 at the time of grant of options in December 2007. Subsequently, on 11.04.2009 the Compensation Committee re-priced the outstanding stock options as on 31.03.2009 at the Market Price of Rs.25.50 determined as per SEBI Guidelines.

Note 4: Options granted to Directors & Senior Managerial Personnel:

Name DesignationNo. of options granted under

ESOP 2005

No. of options granted under

ESOP 2005 (Re-issue I)

No. of options granted under ESOP 2007 for Key Employees

Mr.A.P.Kurian Non-executive Chairman 60,000 Nil NilMr.R.Bupathy Non-executive Director Nil 60,000 NilMr.Mahesh Vyas Non-executive Director 60,000 Nil NilMr.Punnoose George Non-executive Director 60,000 Nil NilMr.Satish Menon Chief Operating Officer 80,900 Nil 5,08,982*Mr.A.Balakrishnan Chief Technology Officer 80,500 Nil 5,59,603*Mr.Binoy Varghese Samuel Chief Financial Officer 60,600 Nil 3,97,810*Mrs.Jaya Jacob Alaxander Chief Human Resources 43,700 Nil 2,55,645*Mr.K.Venkitesh National Head - Distribution Nil Nil 3,02,960*Mr.Krishnan Ramachandran Chief Executive Officer – Barjeel

Geojit SecuritiesNil Nil 2,00,000*

* In all these cases the stock options granted exceeded 5% of the total stock options granted during the year 2007-08.

Annexure IISTATEMENT OF FOREIGN EXCHANGE EARNING AND OUTGO

Particulars 2009-10 2008-09Foreign Exchange earnings Nil Rs.5,61,82,581/-Foreign Exchange outgo Rs.31,23,181/- Rs.44,61,396/-


CORPORATE GOVERNANCE REPORT

(Pursuant to Clause 49 of the Listing Agreement)

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

The basic philosophy of Corporate Governance at ‘Geojit’ is to achieve business excellence and to create and enhance the value for its Stakeholders, Customers, Employees and Business Associates and thereby to make a significant contribution to the Economy. The Company endeavours to achieve the highest levels of transparency, accountability, integrity and responsibility by following the best practices in Corporate Governance.

2. BOARD OF DIRECTORS

The Board of Directors comprises 1 Executive and 8 Non-Executive Directors of which 4 are Independent. Except for the Managing Director and the Nominee Director, all other directors are liable to retire by rotation as per the provisions of the Companies Act, 1956.

During the year ended 31st March 2010, 6 Board Meetings were held on 11th April 2009, 13th May 2009, 11th July 2009, 12th October 2009, 11th January 2010 & 22nd March 2010.

The composition of the Board of Directors and their attendance at the Board Meetings during the year and at the last Annual General Meeting and also the number of other directorships and memberships of committees are given below:

Name of Director

Category

Number of shares held in the Company

as on 31.03.2010

Attendance atDirectorships and Chairmanship/

Membership of Board Committees in Other Companies as on 31.03.2010

Board Meetings

Last AGM DirectorCommittee

MemberCommittee Chairman

Mr. A. P. Kurian C, NE & I 376,900 6 Yes 5 3 NilMr. C. J. George MD & P 40,606,760 6 Yes 5 2 1Mr. Mahesh Vyas NE & I 21,000 5* No 1 Nil NilMr. Rakesh Jhunjhunwala

NE 18,000,000 1 No 9 1 Nil

Mr. R. Bupathy NE & I 18,000 6 Yes Nil Nil NilMr. Punnoose George

NE 9,120,000 6 Yes 1 Nil Nil

Mr. Alkeshkumar Sharma **

N, NE & I Nil 1 NA 10 1 Nil

Mr. Olivier Le Grand

NE Nil 6# Yes 4 Nil Nil

Mr. Pierre Rousseau

NE Nil 5^ No Nil Nil Nil

C: Chairman; NE: Non-Executive; I: Independent; MD: Managing Director; N: Nominee;P: Promoter# Out of six, one Board Meeting was attended through tele-conference* Out of five, two Board Meetings were attended through video conference^ Out of five, four Board Meetings were attended through tele-conference

**Mr. Manoj Joshi, Non-Executive Director nominated on the Board of Directors of the Company by KSIDC Limited was replaced by Mr. Alekshkumar Sharma w.e.f. 20th July, 2009. Mr. Manoj Joshi attended 1 Board Meeting held on 11th April 2009.

Other Directorships do not include Alternate Directorships, Directorships of Private Limited Companies which are neither a subsidiary nor a holding company of a Public Company, Companies under Section 25 of the Companies Act, 1956 and of companies incorporated outside India.

Annexure III


Chairmanship/Membership of Board Committees include Chairmanship/Membership of Audit Committee and Shareholders’/Investors’ Grievance Committee only as clarified by SEBI. The Membership/Chairmanship of Board Committees of Private Limited Companies, Foreign Companies and Companies under Section 25 of the Companies Act, 1956 are excluded for the purpose.

REAPPOINTMENT OF DIRECTORS

The Directors, Mr. Punnoose George and Mr. Rakesh Jhunjhunwala shall retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment. The brief resume and information relating to these directors as required under Clause 49 of listing agreement with the Stock Exchange is furnished as part of the Notice convening the Annual General Meeting.

3. AUDIT COMMITTEE

The Company’s Audit Committee consisted of four Non–Executive Independent Directors and two Non-Executive Directors during the year. The qualification of the members of the Committee, its composition and terms of reference are as per the requirements of Clause 49 of the Listing Agreement. The Chairman of the Audit Committee, Mr. R. Bupathy has expert knowledge of finance and accounting.

During the year ended 31st March 2010, the Committee met 5 times on 11th April 2009, 13th May 2009, 11th July 2009, 12th October 2009 & 11th January 2010.

The Audit Committee Meetings are attended by invitation by the Managing Director, Director (Operations), Director (Planning & Control), Chief Financial Officer and Representative of the Statutory Auditors. The Company Secretary acts as the Secretary of the Audit Committee.

Name of Members of Audit Committee

Designation No. of meetings attended

Mr. R. Bupathy Chairman, Non-Executive Independent Director

5

Mr. A. P. Kurian Member & Non- Executive Independent Director

5

Mr. Mahesh Vyas Member, Non-Executive Independent Director

2

Mr. Alkeshkumar Sharma Member, Non-Executive Independent Director

1

Mr. Olivier Le Grand Member, Non-Executive Director 4

Mr. Pierre Rousseau Member, Non-Executive Director Nil

The Audit Committee has been reconstituted w.e.f. 9th October, 2009 by including Mr. Alkeshkumar Sharma in place of Mr. Manoj Joshi as a member of the Committee.

4. COMPENSATION COMMITTEE The Company constituted an Employee Compensation Committee, which reviews and monitors the implementation

of the Employee Stock Option Plans approved by the Board from time to time. During the year, the Committee met three times on 11th April 2009, 12th October 2009 and 11th January 2010.

Name of Members of Compensation Committee

Designation No. of meetings attended

Mr. R. Bupathy Chairman, Non-Executive Independent Director

3

Mr. Mahesh Vyas Member, Non-Executive Independent Director

2

Mr. Olivier Le Grand Member, Non-Executive Director 3Mr. Pierre Rousseau Member, Non-Executive Director NilMr. C. J. George Member, Managing Director 3


Remuneration to Managing Director The remuneration structure of the Managing Director comprises of salary, commission, perquisites and allowances,

contribution to Provident Fund and Gratuity. The service contract is for a period of 5 years w.e.f. 24.11.2009.

The details of remuneration paid/payable to the Managing Director for the year 2009-10 is given below –

a) Salaries - Rs. 31,39,333

b) Perquisites - Rs. 1,56,401

c) Commission - Rs.1,08,94,000

d) Stock option - Nil

REMUNERATION TO NON-EXECUTIVE DIRECTORS

The Non-Executive Directors do not draw any remuneration from the Company except sitting fees which were paid at the rate of Rs.10,000/- for each meeting of the Board and Audit Committee and Rs.5,000/- for other Board Committees attended by them. The total amount of sitting fees paid during the period was Rs.5,25,000/- as follows –

Name of Director

No. of Stock Options

granted under ESOP 2005/ ESOP 2005

(Reissue – I)

Details of Sitting Fee paid

For Board Meeting

For Audit Committee

Meeting

For Employee Compensation

Committee Meeting

For Shareholders and Investors

Grievance Committee

MeetingMr. A. P. Kurian 60000* 60,000 50,000 NA NAMr. Manoj Joshi Nil 10,000 Nil NA NAMr. Mahesh Vyas 60000* 30,000 20,000 10,000 NAMr. Rakesh Jhunjhunwala Nil 10,000 NA NA NAMr. R. Bupathy 60000** 60,000 50,000 15,000 5,000Mr. Punnoose George 60000* 60,000 NA NA 5,000Mr. Alkeshkumar Sharma Nil 10,000 10,000 NA NAMr. Olivier Le Grand Nil 50,000 40,000 15,000 5,000Mr. Pierre Rousseau Nil 10,000 Nil Nil NATotal 3,00,000 1,70,000 40,000 15,000

* Granted on 07th March 2006 at a discount of Re.1/- per share on the market price of Rs.19.86 prevailing on the day before the date of grant. (The number of Stock Options granted is adjusted to reflect the sub-division of equity shares with effect from 26.09.2006).

** Originally granted on 10th December 2007 at a discount of 50 paise per share on the market price of Rs.66.55 prevailing on the day before the date of grant. It was re-priced at Rs.25.50 per stock option on 11th April 2009 based on the Market Price as on 09th April 2009 without any discount.

All these stock options vest over a period of 4 years and can be exercised before the expiry of 5 years from the date of grant, based on continued directorship with the Company.

5. SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE

The Investors Grievance Committee reviews and redresses shareholder grievances/complaints. The Committee oversees the performance of the Registrars and Share Transfer Agents and recommends measures for overall improvement of the quality of investor services. The members of the Committee are Mr. R. Bupathy, Non-Executive Independent Director, Chairman of the Committee, Mr. C. J. George, Managing Director, Mr. Punnoose George, Non-Executive Director and Mr. Olivier Le Grand, Non-Executive Director. Mr. T. Jayaraj, Company Secretary, acts as the Secretary to the Committee and as the Compliance Officer.

Given below is the position of investor queries/complaints and other correspondences received and attended to during 2009-10:


Nature of complaint/queries No. of complaintsFor non-receipt of dividend, shares lodged for transfer, issue of duplicate share certificates.

Nil

Queries/Complaints redressed NilPending queries/complaints as on 31.03.2010 NilOther letters received from shareholders and replied 300

Every letter received from the investors is replied generally within two weeks of receipt unless the issues involved require investigation or looking into very old records to be retrieved from godowns or information is to be obtained from banks or others.

More than 98% of shares of the Company are traded in dematerialised form. A table showing the requests received for dematerialisation/transfer during 2009-10 is given below –

Transfers DematsNo. of requests No. of shares No. of requests No. of shares

Lodged 2 6000 17 480500Processed 2 6000 16 440500Objections Nil Nil 1 40000Pending as on 31.03.2010 Nil Nil Nil Nil

6. GENERAL BODY MEETINGS

The last three Annual General Meetings of the Company were held as under:

Year Location Date TimeNo. of Special

Resolutions approved at the AGM

2006-07 Hotel International, Veekshanam Road, Kochi - 35

29.06.2007 10.00 a.m. 2

2007-08 -do- 26.07.2008 10.00 a.m. Nil2008-09 Hotel Abad Plaza, M.G

Road, Kochi - 68203511.07.2009 3.30 p.m. Nil

No Extra-Ordinary General Meeting was held during the year 2009-10. At the forthcoming Annual General Meeting there is no item on the agenda that needs approval by Postal Ballot, as required under the provisions of Section 192 A of the Companies Act, 1956.

7. DISCLOSURES

Related party disclosures are provided in Note 20 to the Notes forming part of the accounts in accordance with the provisions of Accounting Standard 18 – “Related Party Disclosures” issued by the Institute of Chartered Accountants of India.

In the opinion of the Board, the transactions entered into by the Company with the related parties were not in conflict with the interest of the Company.

No penalties or strictures were imposed by Stock Exchanges or SEBI or any other statutory authority on the company in any matter related to capital markets during the last three years.

Your Company has complied and adopted Whistle Blower Policy as stipulated under non-mandatory requirements of the Listing Agreement. The Company confirms that it has not denied any personnel access to the Audit Committee of the Company in respect of matters involving alleged misconduct and that it has provided protection to “Whistle Blowers” from unfair termination and other unfair or prejudicial employment practices. Other non-mandatory requirements are not compiled with for the time being.

Code of Conduct:

The Company has posted the Code of Conduct for Directors and Senior Management approved by the Board on its website.


CEO/CFO Certification:

Mr. C.J. George, Managing Director and Mr. Binoy Varghese Samuel, Chief Financial Officer have given CEO/CFO Certificate to the Board. The Board at its meeting held on 28.05.2010 noted that the said CEO/CFO certificate was as per the format given under Clause 49(v) of Listing Agreement.

8. MEANS OF COMMUNICATION

The quarterly, half-yearly and annual results are published in ‘BusinessLine’ and ‘Mangalam’. The results are also posted on the web site of the company, viz., www.geojitbnpparibas.com. The company’s web site also displays all official news releases as well as the presentation made to the institutional investors/analysts, if any. Management Discussion and Analysis forms part of the Annual Report.

9. GENERAL SHAREHOLDERS’ INFORMATION

Annual General Meeting

Date and time : 12th July 2010 – 4.00 p.m.

Venue : Hotel International, Veekshanam Road, Kochi- 682035

Financial Calendar 2010-11

The company follows April – March as the Financial Year. The results of every quarter are declared normally within two weeks from the end of the quarter.

Code of Insider Trading

The Company has adopted and implemented a Code of Conduct pursuant to SEBI (Prohibition of Insider Trading Regulations,1992). The Code lays down the guidelines, which include procedures to be followed and disclosures to be made by the Insiders (Directors, Officers and Designated Employees) while dealing in shares of the Company.

Dates of book closure : 10th July 2010 to 12th July 2010

(Both days inclusive)

Dividend payment date : Within 30 days from the date of Annual General Meeting

Listing on Stock Exchange : Bombay Stock Exchange Limited & National Stock Exchange of India Limited

Stock Code : GEOJITBNPP (NSE) & 532285 (BSE)

Demat ISIN Number : INE007B01023 (NSDL & CDSL)

Market Price data : Market price of the equity shares of the Company during 2009-10 is given in the table below:

NSE BSE

High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

April 2009 31.45 19.00 31.35 19.05

May 2009 49.45 26.50 49.45 26.50

June 2009 52.90 38.55 52.50 38.85

July 2009 43.70 35.65 43.60 35.20

August 2009 47.90 37.00 48.20 38.20

September 2009 47.90 42.00 47.90 42.00

October 2009 47.20 37.30 48.40 37.00

November 2009 40.95 34.00 40.55 35.05

December 2009 44.40 30.55 44.80 36.05

January 2010 44.35 35.60 44.40 35.55

February 2010 38.15 34.10 38.20 33.60

March 2010 37.90 32.80 38.00 32.70


Distribution of the shareholding on the basis of categories of shareholders as on 31.03.2010 is as under:

Category Code

Category of shareholder No. of shareholders

Total no. of shares

Percentage to total shares

(A) Shareholding of Promoter and Promoter Group (1) Indian(a) Individuals 2 4,56,06,760 20.247(b) Bodies Corporate 1 2,00,00,000 8.879

Sub-Total (A)(1) 3 6,56,06,760 29.126(2) Foreign(a) Bodies Corporate 1 7,66,88,959 34.046

Sub-Total (A)(2) 1 7,66,88,959 34.046Total shareholding of Promoter and Promoter Group

(A) =(A)(1)+(A)(2)

4 14,22,95,719 63.172

(B) Public Shareholding (1) Institutions(a) Foreign Institutions/ Banks 5 40,900 0.018(b) Foreign Institutional Investors 3 52,75,227 2.342

Sub-Total (B)(1) 8 5316127 2.360(2) Non-Institutions(a) Bodies Corporate 599 81,78,941 3.631(b) Individuals

i. Individual shareholders holding nominal share capital upto Rs.1 Lakh.

46583 2,67,84,595 11.891

ii. Individual shareholders holding nominal share capital in excess of Rs.1 Lakh.

17 46,15,567 2.049

(c) Trust 1 525 0.000(d) Directors & their relatives 6 2,95,17,900 13.104(e) Non resident Indians 991 68,32,067 3.033(f) Clearing members 229 10,36,496 0.460(g) Hindu undivided families 518 6,75,688 0.300

Sub-Total (B)(2) 48944 7,76,41,779 34.468Total Public Shareholding (B)=(B)(1)+(B)(2) 48952 8,29,57,906 36.828TOTAL (A) +(B) 48956 22,52,53,625 100.000


Distribution of shareholding as on 31.03.2010, pursuant to clause 35 of the Listing Agreement is as under:

Shareholding of nominal value of Rs.

No. of Shareholders

% of Shareholders

Amount of Share Capital in Rs.

% of Shareholding

Upto 5,000 47986 98.02 1,85,88,294 8.25 5,001 – 10,000 486 0.99 37,21,248 1.65

10,001 – 20,000 248 0.50 36,02,527 1.60 20,001 – 30,000 79 0.16 20,08,254 0.89 30,001 – 40,000 49 0.10 18,16,156 0.82 40,001 – 50,000 18 0.04 8,19,557 0.36 50,001 – 1,00,000 43 0.09 30,93,172 1.37

1,00,001 and above 47 0.10 19,16,04,417 85.06Total 48956 100.00 22,52,53,625 100.00

Registrar and Transfer Agents : S.K.D.C. Consultants Limited, Kanapathy Towers, 3rd Floor,1391/A-1, Sathy Road Ganapathy, Coimbatore - 641 006

Share Transfer System : Application for transfer of shares held in physical form are received at the office of the Registrars and Share Transfer Agents of the company. The share certificates in physical format are returned within a period of 10 to 15 days from the date of receipt, subject to the documents being valid and complete in all respects. Shares held in dematerialised form are electronically traded and the Registrars and Share Transfer Agents of the Company periodically receive from the Depository, the beneficiary holdings so as to enable them to update their records. Physical shares received for dematerialisation are processed and completed within a period of 15 days from the date of receipt, provided they are in order in every respect.

Dematerialisation of shares and liquidity

: More than 98% of the Company’s paid-up equity share capital has been dematerialised upto 31st March 2010. Trading in equity shares of the company is permitted only in dematerialised form.

Outstanding ADRs/GDRs/Warrants and convertible instruments, conversion date and likely impact on equity.

: Not applicable.

Investor Correspondence : For any assistance regarding dematerialisation of shares, share transfers, transmission, change of address, non-receipt of dividend or any other query relating to shares or for any generation correspondence, contact

1) S.K.D.C. Consultants LimitedKanapathy Towers, 3rd Floor1391/A-1, Sathy Road, Ganapathy, Coimbatore: 641 006Phone: 0422–6549995, 2539835-836,Fax: 0422- 2539837Email: [email protected]

2) Mr. T Jayaraj, Company SecretaryGeojit BNP Paribas Financial Services Limited,5th Floor, Finance Towers, Kaloor,Kochi - 682017Phone: 0484-2405501/02, Fax: 0484-2405618Email: [email protected]


DECLARATION ON CODE OF CONDUCT

As required by Clause 49 (ID) of the Listing Agreement, it is hereby affirmed that all the Board members and Senior Management personnel have complied with the Code of Conduct of the Company.

Place: Kochi C. J. GeorgeDate: 28th May, 2010 Managing Director

AUDITORS’ CERTIFICATE

To The Members of

Geojit BNP Paribas Financial Services LimitedWe have examined the compliance of conditions of Corporate Governance by Geojit BNP Paribas Financial Services Limited (“the Company”) for the year ended on 31st March 2010, as stipulated in clause 49 of the Listing Agreement of the said company with the Stock Exchanges.The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.In our opinion, and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Deloitte Haskins & SellsChartered Accountants

(Registration No.008072S)

M. RamachandranPlace: Kochi PartnerDate : 28th May, 2010 (Membership No.16399)


Management Discussion and Analysis Report

Economy OverviewAfter a year of reduced economic growth resulting from the impact of global events, India’s economy bounced back with robust industrial growth, improved exports and strong GDP growth. Consequently capital expenditure and infrastructure investments also showed an increase. Improved outlook for investment was visible across the globe and capital markets in most parts of the world showed bullish sentiments and activity. India was viewed by global investor community as one of the attractive investment destinations and significant FII inflows came back into Indian Capital market.

Industry Overview After touching its recent lows in March 2009, the markets began to surge from the beginning of April 2009 with large FII inflows taking the Sensex from a low of 8047 in March 2009 to a level of 17793 in March 2010. Reversing the trend of net outflow of Rs.48,252 crore in 2008-09, there was a net inflow of Rs.1,10,752 crore in the FII investments in 2009-10. This directly impacted the volumes and the number of active clients. The market capitalisation of equity shares traded in the NSE increased more than 100% in the last one year. The total turnover during the year in NSE cash and F & O segments showed an increase of nearly 50% and 60% respectively. BSE cash market turnover increased by 25%. All these positively influenced the revenues of your Company.There have been significant changes in the structure of distribution business during the year. SEBI abolished the entry load and consequently distributors are expected to earn their fees directly from the clients. There are discussions of similar limitations in the marketing of certain insurance products also by the regulators. Moreover confusion over the regulatory jurisdiction over the sale of unit linked insurance policies created further uncertainty. All these changes in the structure of distribution mechanism had a negative impact on the distribution business.

Review of operations The various activities of the Company showed significant improvement in revenue and profits during the year.

a) Brokerage services Brokerage activity saw an increase in number of active clients and volumes compared to the previous year. The

improvement in market conditions enabled the Company to realise the benefits from the geographical expansion and technological upgradation undertaken earlier. The Company added 12 outlets during the year and has a total of 508 outlets. During the year, the Company launched a new captively developed online investment and trading platform called ‘Flip’. The Company expects to enhance its internet trading business with this new multi-featured platform. Currency futures trading which was launched in October 2008 picked up volumes and revenues during the year.

Brokerage from equity and derivatives continued to be the main source of income of the Company and contributed 76% of the consolidated revenue during this financial year. The Company earned brokerage revenue of Rs.231.98 crore from capital market activities, an increase of 91% from the previous year. Our total traded volume showed an increase of 80% in the cash segment and 50% in the F & O segment. The number of broking clients increased 16% during the year. Brokerage revenue from internet trading grew by 111%.

b) Depository services Number of depository accounts increased to 3.21 lakh at the end of the year and the income from this activity increased

by 35% to Rs.10.06 crore. The value of assets under custody increased by 98% to Rs.8878 crore. 33,000 accounts were added which represents 1.69% of the increase in the active depository accounts in NSDL and CDSL during the year. A total of 19.57 lakh active accounts were added in both the depositories during the year, which may not be unique accounts as clients are permitted to open depository accounts with more than one depository participant.

c) Distribution of financial products Revenue from distribution of mutual funds was adversely affected due to changes in the commission payment

structure during the middle of the year. The Company is strengthening its advisory capabilities aiming to improve and standardise the advisory skills of our employees. The management expects that this effort will yield results in the years to come. The insurance agency of Metlife continues to do satisfactorily. However, if there is any changes in the fee structure of ULIP policies resulting from the ongoing debate, there will be an impact resulting from such changes. The Company has earned a total income of Rs.9.62 crore from distribution business during the year which was lower by 19%.

d) Portfolio Management Services The portfolio management services of the Company performed very well by providing returns much better than the

benchmark returns during the year under review. On a trailing 12 month basis, till the date of this Report, the portfolio increased by 124.92 % vis-à-vis 53.97 % increase in Sensex, and CNX Nifty increase of 51.97 percent. There was an improvement in the assets under management and the fees improved by 38% compared to previous year. The


Company has aggressive plans to grow the Portfolio Management Services among high net worth resident individuals as well as non residents.

e) Financing The financing activities in the form of margin funding showed increased revenues corresponding to market activities.

However, there is a fall in the revenues of NBFC subsidiary on account of lower loan against shares and loan against commodities. Total income from financing was Rs.4.01 crore.

f) IT Service and products Geojit Technologies, the subsidiary engaged in IT development and services achieved CMMI Level 3 certification

during the year, which is recognition of the Company’s sustained commitment to deliver quality products and services to its clients. Apart from servicing group companies, the company was able to generate revenues from other customers and also received export orders during the year. The Company generated consolidated revenue of Rs.11.24 crore, an increase of 69% over the previous year and a net profit of Rs.4.67 crore, an increase of 135%. The future prospects for this division look bright as the team is continuing to get export orders.

Joint ventures i. Barjeel Geojit Securities, Dubai Barjeel Geojit continues to do well. The Company performed commendably in both the Indian equity business,

and mutual funds and insurance distribution among NRIs in the UAE and Oman. This 30% joint venture recorded a net profit of Rs.7.46 core, an increase of 264% over the last year. The mutual fund assets under management handled by Barjeel Geojit increased by 69% to Rs.959 crore. Total assets under management including equities as on 31.03.2010 is Rs.1,836 crore.

ii. Aloula Geojit Brokerage Company, Saudi Arabia This 28% Joint Venture is now well positioned as a complete financial advisory and investment solutions provider in

Saudi Arabia following approval of additional licenses for Underwriting, Asset Management, Advisory and Custody Service in the Securities Business by the Capital Market Authority during the year. The new licenses will allow Aloula Geojit to facilitate/advise its clients including NRIs to be able to deal in international markets including Indian market. Saudi Capital Market is yet to show an improvement like other world markets and therefore revenues for the joint venture is yet to pick up. The Company incurred a loss of Rs.11.19 crore during the year, out of which our share is Rs.3.13 crore.

iii. BNP Paribas Securities India, Mumbai This 50% Joint Venture with BNP Paribas for institutional business improved its revenue significantly. The current

year revenue was Rs.39.31 crore higher by 146% over the previous year. On account of the inherently high cost nature of institutional business, the Company is yet to reach the break even level. The Company incurred a loss of Rs.14.84 crore during the year, out of which our share is Rs.7.42 crore. Presently the Company has a research team which covers 95 stocks with market capitalisation of 72 billion dollars, comprising 56% of the total NSE market capitalisation. There has been an increase in the number of domestic and foreign institutional clients also. It is expected that the joint venture will generate higher revenues and market share in future.

Business Tie-ups Partnership with South Indian Bank and City Union Bank has been executed in January 2010 to provide online trading facility for bank’s retail clients. The Company has already tied up with Axis Bank and Federal Bank on similar lines. The Company has also partnered with Federal Bank for offering Portfolio Investment Scheme for NRIs during the year.

Value added services During the year certain regulatory changes happened which enabled us to provide value added services to clients. SEBI has allowed the Stock Exchanges to trade in mutual funds. The Company has launched online investments in mutual funds through National Stock Exchange of India’s Mutual Funds Service System (MFSS). IRDA has allowed life insurers to sell insurance online. The Company has partnered with Royal Sundaram Alliance Insurance Company to distribute all their personal lines General Insurance products and to issue policies online from our offices.

Outlook 2010-11The economy is expected to grow over 8% and widely recognised as one of the stable and consistently growing investment destinations in the world. India has inherent strengths in terms of domestic demand, skilled manpower and reliable regulatory policies which have been widely acclaimed. This will certainly result in a positive re-rating of the country’s investment attractiveness. The recent events in Greece, Spain and elsewhere in Europe had brought in reduced risk appetite and reverse investment flow from the markets. The global environment and linkages are likely to affect our markets also, increasing the volatility of the markets. It is a matter of concern that the retail investor population in the


country is not growing at a desirable rate as a result of high volatility. Regulatory changes in the fee structure of distribution business are also a matter of concern. However, the management is of the view that consistent and high economic growth which directly affects corporate results and also the demand for products/services and capital investments will eventually make India an attractive investment destination. Your Company has set up a business model which can reap the benefits of such an environment.

Opportunities & Threats Capital market activities in which most of our activities depend on is also influenced by global events and hence there is an amount of uncertainty in the near term outlook of the market. The economic crisis in some countries in the Europe has added some volatility globally and Indian stock market has not yet decoupled from such global trends. The recent increase in inflation rate in India is a cause of concern as it can affect corporate profitability. The percentage of retail savings that is channeled into equities and equity related products in the country are still much lower than in developed countries. Fast economic growth generating higher savings and better corporate performance is likely to provide growth opportunities for the business of your company. The close association with the large and globally reputed partner like BNP Paribas would assist us in exploring avenues for growth.

Risks and Concerns Market conditions, in particular the performance of the equity markets, contribute substantially to the Company’s growth and will impact on our ability to repeat or improve on the earnings. The high volatility being witnessed in the equity markets may have an effect on the operations of the Company. The Capital market industry in which your Company is operating is subject to extensive regulation. However the Company has a proper and adequate system of internal control designed to ensure regulatory compliances.

Internal Control Systems The Company has an adequate system of internal controls to ensure accuracy of accounting records, compliance with all laws & regulations and compliance with all rules, procedures & guidelines prescribed by the management. In addition to external firms of Chartered Accountants auditing branches, the Company has set up an internal audit department with competent personnel. The internal audit team regularly visits branches for ensuring regulatory compliance. Post audit reviews are also carried out to ensure follow-up on the observations made. The Audit Committee of the Board reviews the scope of the internal audit on a regular basis.

Human ResourcesThe company places significant importance to its human capital. Geojit has a very young workforce of 2,780 at the end of the year. The company believes in sharing the growth and prosperity based on performance & potential. Hence the company has been providing incentives to its employees to ensure commitment. The Company’s remuneration structure includes a significant component of variable pay, which is based on performance. The Company also granted ESOPs to its Key Employees in recognition of their performance and as a measure of retention. ESOPs were also granted to employees in long-term service with the Company and managers of the Company based on their profile and continued service to the Company. The company has been paying special attention to improve the skill set of the employees through various training programs. All employees are encouraged and incentivised to get themselves certified in relevant industry standard certifications such as CFP, NCFM, BSEC & AMFI. Majority of the employees have obtained such certifications. We took significant effort in giving training to employees at various levels and conducted 1703 training programmes during the year, which covered 13959 participants. It is a matter of pride for your Company that a team of our young managers won the first prize and trophy for the third year consecutively in the annual Young Managers Contest organised by the Kerala Management Association. Yet another feather in the cap was the “Manager of the Year” award bestowed on Mr.A.Balakrishnan, the Chief Technology Officer of the Company by the Kerala Management Association.

Cautionary NoteStatements in this Report, describing the Company’s objectives, projections, estimates and expectations may constitute “forward looking statements” within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results may be different from those expressed or implied since the Company’s operations are affected by the many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.


AUDITORS’ REPORT

To the Members of

Geojit BNP Paribas Financial Services Limited

1. We have audited the attached Balance Sheet of Geojit BNP Paribas Financial Services Limited (“the Company”) as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, (‘CARO’) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination of those books;

(iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

(vi) On the basis of the written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.


Registration No.008072S



ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)

i) Having regard to the nature of the Company’s business, clauses (ii), (iii)(d), (iv) with regard to purchase of inventory and sale of goods, (vi), (viii), (x), (xiii), (xv), (xvi), (xviii), (xix) and (xx), of paragraph 4 of CARO are not applicable.

ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The fixed assets have been physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

iii) In respect of unsecured loans granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs.87,638,000/- to 3 parties during the year. At the year-end, the outstanding balances of such loans aggregated Rs.62,500,000/- (number of parties: 1) and the maximum amount involved during the year was Rs.87,638,000/- (number of parties: 3).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The principal amounts of the unsecured loans granted to 3 parties are repayable on demand and there is no repayment schedule. Interest is payable on demand.

(d) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, there are no overdue amounts.

In respect of unsecured loans taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has taken loans aggregating to Rs.34,142,046/- from 2 parties during the year. At the year-end, the outstanding balance of such loans taken aggregated to Rs. Nil and the maximum amount involved during the year was Rs.34,142,046/- (number of parties: 2).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) In respect of the said loans, the principal and interest amounts were repayable on demand and were settled accordingly.

iv) In our opinion, and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system.

v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.


vi) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2010 on account of disputes are given below:

Statute Nature of DuesForum where Dispute

is PendingPeriod to which Amount Relates

Amount Involved (Rs. in lakhs)

Income Tax Act, 1961 Income Tax Commissioner of Income Tax (Appeals)

2004-05 14.24


2005-06 36.83


2006-07 25.27

Finance Act, 1994 Service Tax and Penalty

Service Tax Appellate Tribunal

01.07.03 to 30.06.04 4.48

viii) In our opinion, and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to a bank from which working capital facilities have been availed.

ix) In our opinion, the Company has maintained adequate records where it has granted loans and advances on the basis of security by way of pledge of shares.

x) Based on our examination of the records and evaluations of the related internal controls, the Company has maintained proper records of the transactions and contracts in respect of its dealing in shares and securities, and timely entries have been made therein. The aforesaid securities have been held by the Company in its own name.

xi) In our opinion, and according to the information and explanations given to us, and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.


Registration No.008072S



BALANCE SHEET AS AT MARCH 31, 2010(In Rupees)

ParticularsSch. No.

As at31-03-2010

As at 31-03-2009

SOURCES OF FUNDS

Shareholders’ Funds Share Capital 1 225,253,625 223,411,864 Employee Stock Options Outstanding 2 18,835,299 14,712,153 Reserves and Surplus 3 2,946,258,720 2,522,467,393

TOTAL 3,190,347,644 2,760,591,410

APPLICATION OF FUNDS Fixed Assets 4Gross Block 714,958,715 666,634,104 Less : Accumulated Depreciation 313,991,924 214,138,800

400,966,791 452,495,304 Capital Work-in-Progress 28,259,771 3,638,383 Net Block 429,226,562 456,133,687

Investments 5 1,252,855,099 1,504,369,055

Deferred Tax Asset (Net) 7,615,000 1,666,000

Current Assets, Loans & Advances

Sundry Debtors 6 1,091,423,344 413,734,664 Cash & Bank Balances 7 2,028,305,521 1,441,114,513 Other Current Assets 8 29,656,161 10,680,030 Loans & Advances 9 1,199,671,928 963,348,372

4,349,056,954 2,828,877,579 Less: Current Liabilities & Provisions

Liabilities 10 2,623,910,972 1,893,161,610 Provisions 11 224,494,999 137,293,301

2,848,405,971 2,030,454,911 Net Current Assets 1,500,650,983 798,422,668

TOTAL 3,190,347,644 2,760,591,410

Significant Accounting Policies and Notes to Accounts 18

Schedules 1 to 18 form an integral part of the Accounts. In terms of our report attached.

For Deloitte Haskins & Sells Chartered Accountants


M. Ramachandran A. P. Kurian C. J. George Partner Chairman Managing Director

Place: Kochi Place: Kochi T. Jayaraj Date: 28th May 2010 Date: 28th May 2010 Company Secretary


Schedules 1 to 18 form an integral part of the Accounts. In terms of our report attached.





PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010(In Rupees)

ParticularsSch. No.

Year Ended 31-03-2010


Income Income from Operations 12 2,617,947,436 1,406,065,233 Other Income 13 262,641,226 188,166,490

2,880,588,662 1,594,231,723

Expenditure Employee Costs 14 510,931,817 430,864,623 Operating Expenses 15 1,010,348,723 486,163,773 Establishment & Other Expenses 16 426,645,802 372,128,388 Interest 17 323,753 1,118,610 Depreciation 4 115,183,550 101,322,357

2,063,433,645 1,391,597,751

Profit Before Tax 817,155,017 202,633,972 Provision for Tax - Current 244,360,000 57,090,000 - Deferred (Refer Note 22 of Schedule 18) (5,949,000) (3,843,822) - Fringe Benefit Tax - 4,200,000 - Earlier Years’ Income Tax 7,201,415 -

245,612,415 57,446,178

Net Profit 571,542,602 145,187,794 Balance brought forward from Previous Year 549,638,076 564,667,164 Profit Available for Appropriation 1,121,180,678 709,854,958

Less: Appropriations: Transfer to General Reserve 57,200,000 30,000,000 Proposed Dividend on Equity Share Capital 168,940,219 111,705,932 Corporate Dividend Tax Thereon 28,058,859 18,151,809 Corporate Dividend Tax credit for Previous Year (18,079,509) - Dividend paid on shares allotted under ESOP Schemes 338,399 359,141

236,457,968 160,216,882 Balance Carried to Schedule 3 884,722,710 549,638,076 Earnings Per Share (Equity shares of face value Re. 1/- each) (Refer Note 21 of Schedule 18): Basic 2.55 0.68 Diluted 2.53 0.66

Significant Accounting Policies and Notes to Accounts 18


(In Rupees) Particulars 2009-10 2008-09

CASH FLOWS FROM OPERATING ACTIVITIES Profit before Tax 817,155,017 202,633,972 Add/(Less): Depreciation / Amortisation 115,183,550 101,322,357 Employee stock option compensation expense amortised 4,123,146 5,426,266 Provision for doubtful debts 12,363,229 18,934,000 Interest expense 323,753 1,118,610 Loss on sale / write off of fixed assets 8,922,597 5,615,187 Dividend from long term non-trade investments (106,720,063) (5,284,625)Profit on sale of Investment -BSE Shares - (56,182,581)Dividend from current non-trade investments (19,951,677) (39,846,118)Profit on sale of current non-trade investments (7,803) (7,494,983)Interest earned on fixed deposits (60,604,158) (62,522,923)Cash flow before Changes in Working Capital 770,787,591 163,719,162 Adjustments for changes in Working capital: (Increase)/Decrease in Debtors (690,051,909) 214,683,029 (Increase)/Decrease in Loans & Advances (230,312,794) (205,843,497)Increase/(Decrease) in Current Liabilities 730,624,848 5,576,792 Increase/(Decrease) in Provisions (275,045) 2,597,485 Cash generated from Operations 580,772,691 180,732,971 Income tax including fringe benefit tax paid (net of refunds) (236,404,157) (62,390,041)Cash flows from Operating Activities 344,368,534 118,342,930 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (73,648,337) (228,804,357)Sale of fixed assets 1,070,703 337,873 (Increase)/Decrease in capital advances (24,621,388) 13,664,892 Purchase of investments (2,471,534,421) (3,122,676,045)Investment in subsidiary company (500,000) (196,540,000)Sale of investments 2,723,556,181 3,294,251,900 Dividend received from long term non-trade investments 106,720,063 61,467,205 Dividend received from current non-trade investments 19,951,677 39,846,118 (Increase)/Decrease in fixed deposits with banks (237,238,860) (138,986,290)Interest received on fixed deposits 41,628,027 56,988,041 Cash flow from / (used) in Investing Activities 85,383,645 (220,450,663)CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from preferential issue of equity shares - 13,910,514 Share premium received on preferential issue of equity shares - 295,737,528 Proceeds from issue of shares under ESOP incld. Share Premium 33,348,454 5,020,390 Dividend paid on equity share capital (111,919,817) (145,542,192)Corporate dividend tax paid (904,914) (24,029,985)Interest paid (323,753) (1,118,610)Cash flow from / (used in) Financing Activities (79,800,030) 143,977,645 Net Increase in Cash and Cash Equivalents 349,952,149 41,869,912 Opening Cash & Cash Equivalents # 927,219,416 885,349,504 Closing Cash & Cash Equivalents # 1,277,171,565 927,219,416 (Refer Note 11 of Schedule 18)

Significant Accounting Policies and Notes to Accounts - Schedule 18 # - Includes Client's balances in current accounts with banks.

CASH FLOW STATEMENT

Schedules 1 to 18 form an integral part of the Accounts. In terms of our report attached. For Deloitte Haskins & Sells Chartered Accountants


M. Ramachandran A. P. Kurian C. J. George Partner Chairman Managing Director Place: Kochi Place: Kochi T. Jayaraj Date: 28th May 2010 Date: 28th May 2010 Company Secretary


SCHEDULES ATTACHED TO AND FORMING PART OF ACCOUNTS (In Rupees)

ParticularsAs at

31-03-2010As at

31-03-2009

Schedule 1: Share Capital Authorised 250,000,000 Equity Shares of Re.1/- each (Previous Year: 250,000,000 Equity Shares of Re.1/- each) 250,000,000 250,000,000

250,000,000 250,000,000 Issued, Subscribed, Called-up and Paid-up 225,253,625 Equity Shares of Re.1/- each, fully paid-up Includes: (a) 106,093,000 equity shares issued as fully paid bonus

shares by capitalisation of General Reserve and Securities Premium.

(b) 1,841,761 shares were allotted under Employee Stock Option Schemes during the year.

(Previous year: 223,411,864 Equity Shares of Re.1/- each) 225,253,625 223,411,864 225,253,625 223,411,864

Schedule 2: Employee Stock Options Outstanding Employee stock options outstanding 28,217,194 28,408,471 Less: Deferred employee compensation expense 13,505,041

Less: Employee compensation expense amortised (4,123,146) (9,381,895) (13,696,318)(Refer Note 4 of Schedule 18) 18,835,299 14,712,153

Schedule 3: Reserves & Surplus Securities Premium As per last Balance Sheet 1,770,999,430 1,414,574,278 Add: Received on conversion of warrants during the year - 347,762,850 Add: Received on allotment of shares under ESOP 31,506,693 8,662,302

1,802,506,123 1,770,999,430 Capital Reserve As per last Balance Sheet 33,345,030 - Add: Application money received on warrants expired - 33,345,030

33,345,030 33,345,030 General Reserve As per last Balance Sheet 168,484,857 138,484,857 Add: Transfer from Profit and Loss Account 57,200,000 30,000,000

225,684,857 168,484,857

Profit and Loss Account 884,722,710 549,638,076

2,946,258,720 2,522,467,393


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ParticularsAs at

31-03-2010As at

31-03-2009Schedule 5: Investments Long Term Investments - At cost In Wholly Owned Subsidiary Companies:- Unquoted, Non-trade 4,000,000 (Previous Year: 4,000,000) Equity Shares of Rs.10/- each, 16,000,000 16,000,000 fully paid-up, in Geojit Investment Services Limited (Includes 2,400,000 bonus shares of Rs.10/- each, fully paid-up)

160,100,000 (Previous Year: 160,050,000) Equity Shares of Rs.10/- each, 160,971,000 160,471,000 fully paid-up, in Geojit Financial Management Services Private Limited (50,000 shares were purchased during the year)

In Subsidiary Company:- Unquoted, Non-trade 67,197,420 (Previous Year: 67,197,420) Equity Shares of Rs.2/- each, 142,368,780 142,368,780 fully paid-up, in Geojit Credits Private Limited

In Joint Ventures:- Unquoted, Trade 1,500 (Previous Year: 1,500) Equity Shares of Arab Emirates Dirham (AED) 19,138,560 19,138,560 1,000 each in Barjeel Geojit Securities LLC, United Arab Emirates

11,200,000 (Previous Year: 11,200,000) Equity Shares of Saudi Riyal (SR) 301,990,457 301,990,457 10/- each in Aloula Geojit Brokerage Company, Saudi Arabia In Others:- Unquoted, Non-trade 400 (Previous Year: 400) ‘C’ class shares of Rs.500/- each in Muvattupuzha Co-operative Super Speciality Hospital Limited 200,000 200,000

11,401 (Previous Year: 11,401) Equity Shares of Re.1/- each, fully paid-up, in Bombay Stock Exchange Ltd. 877 877

100 (Previous Year: 100) Equity Shares of Rs.10/- each, fully paid-up, in Cochin Stock Exchange Ltd. 1,000 1,000

640,670,674 640,170,674 Current Investments - At lower of cost and net asset/ fair value Unquoted, Non-trade In Mutual Funds & Government Securities 612,184,425 864,198,381 (Refer Note 6 of Schedule 18) 1,252,855,099 1,504,369,055

Aggregate cost of unquoted investments 1,252,855,099 1,504,369,055 Aggregate net asset / market value of mutual fund investments 612,202,727 864,203,193

Schedule 6: Sundry Debtors - Unsecured, unless stated otherwise Considered Good (Refer Note 7(a) of Schedule 18) Client balances outstanding for a period exceeding six months (Secured) 96,477,660 15,889,585 Other Client balances 647,964,734 358,798,789 Client balances - Margin Funding Loan Receivable (Secured) 185,142,582 30,904,533 Dues from Stock Exchanges 161,838,368 8,141,757

1,091,423,344 413,734,664 Considered Doubtful Client balances outstanding for a period exceeding six months 60,546,640 56,530,870 Other Client balances 6,059,291 9,028,591

66,605,931 65,559,461 Less: Provision for doubtful debts (Refer Note 7(b) of Schedule 18) 66,605,931 65,559,461

- - 1,091,423,344 413,734,664



ParticularsAs at

31-03-2010As at

31-03-2009

Schedule 7: Cash & Bank Balances Cash in hand 679,990 330,153 Balances with Scheduled Banks: - in Current Accounts 71,257,704 50,113,819 - in Current Accounts - Clients 1,202,501,010 874,167,098 - in Current Accounts - Unclaimed Dividend 2,732,861 2,608,347 - in Fixed Deposit Accounts # 751,133,956 513,895,096 (# - Fixed deposits worth Rs. 516,831,074/- (Previous Year: Rs. 200,185,861/-) are pledged with banks as security margin for (a) guarantees issued by them in favour of Stock Exchanges and (b) working capital facility provided by a bank.)

2,028,305,521 1,441,114,513 Schedule 8: Other Current Assets Interest accrued on fixed deposits 29,656,161 10,680,030

29,656,161 10,680,030 Schedule 9: Loans & Advances - Unsecured and Considered Good, unless otherwise stated Advances recoverable in cash or in kind or for value to be received 27,981,065 32,889,342 Loan to a Subsidiary Company 62,500,000 - Advance to employees 446,465 505,142 Advance income tax (Net of provision) - 3,096,204 Income tax paid under protest, pending in appeal 22,813,214 13,706,248

113,740,744 50,196,936 Deposits & Margins with Stock Exchanges 1,004,630,211 835,296,163 Deposits with Government Authorities 2,697,021 2,199,645 Other deposits 78,603,952 75,655,628

1,085,931,184 913,151,436 1,199,671,928 963,348,372



ParticularsAs at

31-03-2010As at

31-03-2009

Schedule 10: Current Liabilities Sundry Creditors (Refer Note 8 & 9 of Schedule 18) - Micro and Small Enterprises - - - Clients 2,308,757,886 1,680,283,981 - Stock exchanges 1,467,937 20,588,111 - Others 267,963,583 145,745,006 Security deposit from Business Associates 15,378,808 15,988,252 Statutory liabilities 22,400,802 22,377,500 Investor Education & Protection Fund shall be credited by: - Unpaid dividend (Refer Note 10 of Shedule 18) 2,732,861 2,608,347 Other liabilities 5,209,095 5,558,313 Overdrawn Scheduled Bank Current Accounts - 12,100

2,623,910,972 1,893,161,610

Schedule 11: Provisions Employee benefits (Refer Note 19(III) of Schedule 18) 6,149,649 6,402,694 Income tax (Net of advance tax) 21,302,124 - Fringe benefit tax (Net of advance tax) 24,448 158,552 Wealth tax 19,700 41,700 Proposed dividend on: - Equity share capital 168,940,219 111,705,932 - Corporate dividend tax 28,058,859 18,984,423

224,494,999 137,293,301



Particulars Year Ended 31-03-2010


Schedule 12: Income from Operations Brokerage 2,319,804,510 1,213,418,285 Depository services 100,659,390 74,474,335 Financial products distribution 41,118,900 35,027,573 Portfolio management services 14,983,601 10,894,561 Interest from margin funding business 22,228,753 13,526,441 Overdue fees collected from Clients 101,107,245 51,753,477 Brokerage - Real estate business 266,564 - Miscellaneous income 17,778,473 6,970,561

2,617,947,436 1,406,065,233

Schedule 13: Other Income Income from long-term, non-trade investments (Includes 106,720,063 5,284,625 dividend from subsidiary company: Rs.106,719,742/- (Previous Year: Rs.5,258,315/-)) Income from long-term, trade investment - 56,182,581 Interest earned on fixed deposits (Gross) (Tax Deducted 60,604,158 62,522,923 at Source: Rs.6,973,776/- (Previous Year: Rs13,524,204/-)) Dividend on current, non-trade investments 19,951,677 39,846,118 Profit on sale of current non-trade investments 7,803 7,494,983 Cost recovery for shared services 28,666,660 5,624,165 Royalty 11,128,899 3,394,481 Infrastructure usage fees 29,537,915 - Miscellaneous income 6,024,051 7,816,614

262,641,226 188,166,490



ParticularsYear Ended 31-03-2010


Schedule 14: Employee Costs Salaries, Allowances & Bonus (Refer Note 12 & 14 of Schedule 18) 472,782,591 390,995,580 Contribution to Provident & Other funds 11,278,066 14,666,104 Staff welfare expenses 26,871,160 25,202,939

510,931,817 430,864,623

Schedule 15: Operating Expenses Business associates’ commission (Equity) 722,906,532 221,459,396 Marketing fees 126,516,000 55,637,904 Marketing incentive 18,260,891 29,345,501 Business associates’ commission (Distribution) 2,742,049 4,816,173 Connectivity charges 75,447,229 72,910,377 Depository expenses 17,270,608 10,670,255 Research expenses 9,864,001 57,191,999 Postage charges - Contract Note 14,198,140 10,983,589 Loss on sale of stock-in-error 5,390,000 4,617,973 Transaction charges 124,797 834,931 Insurance - NSE, BSE & NSDL 1,623,008 1,872,255 SEBI Registration fees 60,000 1,638,283 Registration & Renewal fees 1,264,861 3,901,030 Miscellaneous expenses 14,680,607 10,284,107

1,010,348,723 486,163,773



ParticularsYear Ended 31-03-2010


Schedule 16: Establishment & Other Expenses

Rent 113,858,991 99,023,840

Advertisement 48,642,440 42,731,708

Telephone expenses 40,537,027 36,864,353

Postage 17,374,463 18,407,951

Electricity charges 35,740,442 27,852,679

Software charges 17,214,277 14,713,808

Repairs & Maintenance:

- Leasehold Building 4,178,554 2,510,954

- Others 31,928,945 20,962,035

Printing & Stationery 17,005,923 14,924,362

Travel & Conveyance - Directors 1,427,337 1,893,415

- Others 13,979,984 13,677,283

Legal & Professional fees (Refer Note 15 of Schedule 18) 16,171,737 15,415,050

Office expenses 10,001,932 7,320,392

Provision for doubtful debts (Net of write backs) 12,363,229 18,934,000

(Refer Note 7(b) of Schedule 18)

Bad debts 37,974 968,274

Business promotion expenses 11,644,988 6,349,973

Bank guarantee commission 4,603,684 8,445,288

Meetings & Seminars 4,567,037 1,387,051

Rates & Taxes 4,689,084 3,822,542

Subscriptions 3,958,513 3,391,271

Bank charges 506,822 400,996

Loss on sale / write off of fixed assets 8,922,597 5,615,187

Insurance - others 1,409,785 1,463,068

Sitting fees to Directors 525,429 445,000

Charity 2,640,350 173,750

Listing fees 110,750 102,435

Registrar & Transfer expenses 162,243 856,510

Consultancy fee 556,000 276,000

Miscellaneous expenses 1,885,265 3,199,213

426,645,802 372,128,388

Schedule 17: Interest

On loans from subsidiaries 43,519 117,371

On temporary overdrafts 280,234 1,001,239

323,753 1,118,610


Schedule 18: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. Significant Accounting Policies

Accounting Convention

The financial statements are prepared under the historical cost convention on accrual basis and in accordance with the Companies Act, 1956, and the Accounting Standards specified in Rule 3 of Companies (Accounting Standards) Rules, 2006.

Use of Estimates

The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the management to make estimates that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates.

Fixed Assets and Depreciation

Fixed assets are stated at cost less accumulated depreciation. Cost includes cost of purchase and other costs attributable to bringing the assets to working condition for intended use.

Depreciation on fixed assets, other than improvements to leasehold premises and V-Sat equipments, capitalised upto 31st March 2007 is provided under the straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. Fixed assets, other than improvements to leasehold premises and V-Sat equipments, acquired on or after 1st April 2007 are depreciated under the straight line method over the useful life estimated by the management, which are lower than the useful life considered in Schedule XIV, as follows:

Asset Useful Life (In years)Building 40Furniture and Fixtures 5Electrical Equipments 5Office Equipment 5Computers - Data Center Equipments 5Computers - Other than Data Center Equipments 3Vehicles 5

Improvements to leased office premises are depreciated over a period of 5 years irrespective of the lease period, on the assumption that lease agreements will be renewed and the premises will be occupied for a minimum period of five years. If the premises are vacated before the expiry of five-year period, the un-amortised leasehold improvement costs are fully written off in the year of vacation. V-Sat equipments are depreciated over a period of 5 years.

Additions to fixed assets are depreciated from the date of addition and deletions are depreciated upto the date of sale, on pro-rata basis.

Intangible Assets and Amortisation Computer software is considered as intangible asset. Computer softwares capitalised upto 31st March 2007 are amortised

over a period of 6 years and softwares capitalised on or after 1st April 2007 are amortised over a period of 5 years.

Investments Investments are classified as long-term or current based on their nature and intended holding period. Long-term

investments are stated at cost less provision for diminution, other than temporary, in value. Current investments are stated at lower of cost and market value / net asset value.

Income Brokerage income is recognized on the trade date of transaction, upon confirmation of the transactions by stock

exchanges and clients. Income from depository services, penal charges and portfolio management services are recognised on the basis of agreements entered into with clients and when the right to receive the income is established. Commission income from financial products distribution is recognised on the basis of agreement entered with principals

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010


and when the right to receive the income is established. Interest income from margin funding business is recognised on loans given to clients on time proportion basis. Other interest incomes are recognised on time proportion basis. Dividend income is recognised when the right to receive the income is established.

Employee Benefits

Post-employment Benefit Plans

Contributions to defined contribution retirement benefit schemes are recognised as expense when employees have rendered services entitling them to contributions.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the profit and loss account of the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employees renders the service. These benefits include compensated absences such as paid annual leave and performance incentives.

Long-term employee benefits

Compensated absences which are not expected to occur within the twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date.

Leases

Operating lease rentals are charged to Profit and Loss Account of the period to which they relate.

Taxes on Income

Current tax is determined on the taxable income for the year as per the provisions of the Income Tax Act, 1961.

Fringe benefit tax is determined on the fringe benefit values as per the provisions of the Income Tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such asset items can be realised.

Impairment of Assets

Impairment is ascertained at each Balance Sheet date in respect of the Company’s fixed assets. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value, based on an appropriate discount factor. Reversal of impairment loss is recognised as income in the Profit and Loss Account.

Provisions, Contingent Liabilities and Contingent Assets A Provision is recognized, in terms of Accounting Standard 29 – ‘Provisions, Contingent Liabilities and Contingent

Assets’ notified by the Companies (Accounting Standards) Rules, 2006, when there is a present obligation as a result


of a past event, and it is probable that an outflow of resources will be required to settle the obligation, which can be reliably estimated. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the best current estimate.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events, due to occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the Company, or where any present obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the financial statements.

Employee Stock Option

The employee share based compensation costs under the Employee Stock Option Schemes are accounted under the intrinsic value method, wherein the difference between the market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period.

B. Notes on Accounts

1. Contingent Liability:

Particulars As at 31.03.2010(Rs.) As at 31.03.2009(Rs.)Claims against the Company not acknowledged as debts: Legal suits filed against the Company / Matters under Arbitration 28,216,882 19,002,192Income tax demands, pending in appeal 18,340,301 18,813,214Service tax demands, pending in appeal 448,298 448,298

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances): Rs.260,981,090/- (Previous Year: Rs.3,954,773/-).

3. Details of utilisation of the proceeds from the allotment of equity shares to BNP Paribas S.A. on preferential basis:

Particulars Amount (Rs.)Amount pending utilisation as on 1st April 2009 441,097,787Less: Utilisation during the year:For Business Expansion 101,715,424For Investment in Subsidiaries 500,000Balance pending utilization as on 31st March 2010 338,882,363Amount pending utilization as on 31st March 2010 has been invested as follows:In Mutual Funds 338,882,363

4. (a) Employee Stock Option Plan – 2005 (ESOP-2005):

The Company introduced Employee Stock Option Plan-2005 (ESOP-2005) during 2005-06, under which options for 6,989,400 equity shares of Re.1/- each were granted to eligible permanent employees and non-executive directors, including independent directors but excluding promoters, of the Company and its Subsidiaries. The scheme was approved by the Shareholders at the Extra-ordinary General Meeting held on 7th March 2006 and by the Compensation Committee of Directors on 7th March 2006. The options will vest over a period of 4 years from the date of grant, viz., 7th March 2006, as follows:

End of Year Date of Vesting % of options grantedII 7th March 2008 30%III 7th March 2009 30%IV 7th March 2010 40%


The exercise period commences from the date of vesting and will expire not later than 5 years from the date of grant, viz., 6th March 2011. The exercise price has been computed by giving discounts, based on the grade and number of years of service rendered by the employees and directors, to the market price on the date prior to grant date.

The Company has adopted intrinsic value method for accounting employee share based compensation cost. Under the intrinsic value method, the difference between market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period as employee share based compensation cost.

The intrinsic value of 6,989,400 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of four years net of actual forfeiture upto the balance sheet date is Rs.11,027,018/- (Previous Year: Rs. 11,195,621/-) and the proportionate amount amortised during the year is Rs.809,050/- (Previous Year: Rs. 2,091,469/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.6,549,205/- (Previous Year: Rs.16,847,469/-).

Further disclosures on ESOP-2005 are given below:

(i) Grantee-wise details of ESOPs granted:

Class of Grantees Directors Managers and Above Other EmployeesDate of grant 07.03.2006 07.03.2006 07.03.2006Number of options granted 300,000 3,879,400 2,810,000Contractual life:

30% of 6,989,400

30% of 6,989,400

40% of 6,989,400

2 years

3 years

4 years

2 years

3 years

4 years

2 years

3 years

4 yearsVesting conditions Continuation in the services of the Company and such other conditions as

may be formulated by the Compensation Committee from time to time.Method of settlement In Cash In Cash In Cash

(ii) Movement in ESOPs granted:

Class of Grantees Directors Managers and Above Other EmployeesNo. of

OptionsWeighted

Avg. Exercise

Price (Rs.)

No. of Options

Weighted Avg.

Exercise Price (Rs.)

No. of Options

Weighted Avg.


No. of options outstanding at year beginning 204,000 18.86 2,878,050 17.75 2,176,190 17.94No. of options granted - - - - - -No. of options forfeited 42,000 18.86 37,280 17.75 61,800 17.94No. of options exercised 102,000 18.86 875,980 17.75 815,790 17.94No. of options outstanding at year end 60,000 18.86 1,964,790 17.75 1,298,600 17.94No. of options exercisable at year end 60,000 18.86 1,964,790 17.75 1,298,600 17.94

The estimated fair values of each stock option are as follows:

Class of Grantees Weighted Average Fair Values (Rs.)Directors 17.23Managers and Above 17.27Other Employees 17.30


The fair values were calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.19.86, weighted average exercise price as per above, volatility in the market price (of the Company’s share over the one year prior to the date of grant) of 199% (computed with reference to the one year high and low of the market price), dividend yield of 1.76%, contractual life of two to four years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Company’s life, is higher than the volatility of 199% considered above and the Company expects the volatility of its share price to reduce as it matures.

(b) Employee Stock Option Plan – 2005 (ESOP-2005 (Reissue-1)):

During 2007-08, the Company reissued options for 950,500 equity shares of Re. 1/- each to eligible permanent employees and an independent non-executive director, whose is not a promoter, of the Company and its Subsidiaries, forfeited out of Employee Stock Option Plan - 2005 (ESOP-2005) on resignation of employees. The reissue of options forfeited was approved by the Shareholders through postal ballot, whose result was declared on 5th December 2007, and by the Compensation Committee at its meeting held on 12th October 2007. The options will vest over a period of 4 years from the date of grant, viz., 10th December 2007, as follows:

End of Year Date of Vesting % of options grantedII 10th December 2009 30%III 10th December 2010 30%IV 10th December 2011 40%

The exercise period commences from the date of vesting and will expire not later than 5 years from the date of grant, viz., 09th December 2012. The exercise price in the case of employees and directors has been computed by giving discounts, based on the grade of the employees and of fixed amount respectively, to the market price on the date prior to grant date.


The intrinsic value of 950,500 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of four years net of expected forfeiture @ 20% per annum (Previous Year: 20% per annum), is Rs.565,176/- (Previous Year: Rs.587,850/-) and the proportionate amount amortised during the year is Rs.157,325/- (Previous Year: Rs.178,027/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.9,399,002/- (Previous Year: Rs.7,146,277/-).

Further disclosures on ESOP-2005 (Reissue-1) are given below:


Class of Grantees Director Sr. Managers and Above Managers & BelowDate of grant 10.12.2007 10.12.2007 10.12.2007Number of options granted 60,000 74,971 815,529Contractual life:30% of 950,50030% of 950,50040% of 950,500

2 years3 years4 years



Vesting conditions Continuation in the services of the Company and such other conditions as may be formulated by the Compensation Committee from time to time.

Method of settlement In Cash In Cash In Cash



Class of Grantees

Directors Sr. Managers and Above Managers & BelowNo. of

OptionsWeighted

Avg. Exercise

Price (Rs.)

No. of Options

Weighted Avg.


No. of Options

Weighted Avg.


No. of options outstanding at year beginning

60,000 66.05 34,560 65.55 564,981 65.30

No. of options granted - - - - - -No. of options forfeited - - - 65.55 96,824 65.30No. of options exercised 18,000 66.05 4,604 65.55 43,387 65.30No. of options outstanding at year end

42,000 66.05 29,956 65.55 424,770 65.30

No. of options exercisable at year end

- - 5,761 65.55 98,785 65.30


Class of Grantees Weighted Average Fair Values (Rs.)

Directors 56.56

Sr. Managers and above 56.60

Managers and below 56.61

The fair values were calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.66.55, weighted average exercise price as per (b) above, volatility in the market price (of the Company’s share over the one year prior to the date of grant) of 170% (computed with reference to the one year high and low of the market price), dividend yield of 0.60%, contractual life of two to four years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Company’s life, is higher than the volatility of 170% considered above and the Company expects the volatility of its share price to reduce as it matures.

(c) Employees Stock Option Plan 2007 for Key Employees: The Company introduced Employees Stock Option 2007 for Key Employees Plan (ESOP-2007 for Key Employees)

during the year 2007-08, under which options for 2,500,000 equity shares of Re. 1/- each were granted to eligible senior management employees of the Company. The scheme was approved by the Shareholders through postal ballot, whose result was declared on 5th December 2007, and by the Compensation Committee of Directors on 12th October 2007. The options will vest over a period of 7 years from the date of grant, viz., 10th December 2007, as follows:

End of Year Date of Vesting % of options grantedIV 10th December 2011 25%V 10th December 2012 25%VI 10th December 2013 25%VII 10th December 2014 25%

The exercise period commences from the date of vesting and will expire not later than 8 years from the date of grant, viz., 09th December 2015. The exercise price is at 10% discount to the market price on the date prior to grant date.



The intrinsic value of 2,500,000 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of seven years net of expected forfeiture of zero % per annum, is Rs.16,625,000/- (Previous Year: Rs.16,625,000/-) and the proportionate amount amortised during the year is Rs.3,156,771/- (Previous Year: Rs.3,156,771/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.26,024,486/- (Previous Year: Rs.26,024,486/-).

Further disclosures on ESOP-2007 for Key Employees are given below:


Class of Grantees Senior ManagementDate of grant 10.12.2007Number of options granted 2,500,000Contractual life:

25% of 2,500,000

25% of 2,500,000

25% of 2,500,000

25% of 2,500,000

4 years

5 years

6 years


may be formulated by the Compensation Committee from time to time.Method of settlement In Cash


Particulars No. of Options Weighted Avg. Exercise Price (Rs.)No. of options outstanding at year beginning 2,500,000 59.90No. of options granted - -No. of options forfeited - -No. of options exercised - -No. of options outstanding at year end 2,500,000 59.90No. of options exercisable at year end - -

The estimated weighted average fair value of each stock option is Rs.61.67. The fair value was calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.66.55, weighted average exercise price as above, volatility in the market price of the Company’s share over the one year prior to the date of grant of 170% (computed with reference to the one year high and low of the market price), dividend yield of 0.60%, contractual life of 4 to 7 years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Company’s life, is higher than the volatility of 170% considered above and the Company expects the volatility of its share price to reduce as it matures.

The impact on Basic and Diluted Earnings Per Share for the year, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.(0.19) and Rs.(0.19) respectively (Previous Year: Rs.(0.24) and Rs. (0.23) respectively).

5. The Company has contracted fund based and non-fund based (viz. bank guarantee) working capital facilities of Rs.300,000,000/- (Previous Year: Rs.50,000,000/-) and Rs.510,000,000/- (Previous Year: Rs.575,000,000/-) respectively from a bank, which are secured by a charge on the current assets of the Company, both present and future, and counter guarantee of the Company. The balance outstanding in the fund based and non-fund based working capital facilities are Rs. Nil (Previous Year: Rs. Nil) and Rs.487,575,000/- (Previous Year: Rs.390,000,000/-) respectively at the balance sheet date.


6. a) Details of Current Investments – Unquoted & Non-trade (stated at lower of cost and market price / net asset value):

Security

No. of units as on

31.03.2010

Book Valueas on

31.03.2010Rs.

No. of units as on

31.03.2009

Book Valueas on

31.03.2009Rs.

In Government Securities:10.71% Government of India Securities – 2016 30 3,000 30 3,000Total 3,000 3,000In Mutual Funds:Canara Robeco MF - Liquid Plus Super Institutional Daily Dividend (334 units were reinvested during the year and 44,124 units were sold during the year)

- - 43,790 543,310

SBI MF - Ultra Short Term Fund (38,343 units were reinvested during the year)

1,038,637 10,391,575 1,000,294 10,007,937

SBI MF - SHF Liquid Plus Institutional Plan Daily Dividend (106,783 units were reinvested and 15,256,166 units were sold during the year)

- - 15,149,383 151,569,579

HSBC MF - Liquid Plus Institutional Plan Daily Dividend (42,555 units were reinvested and 11,910,428 units were sold during the year)

- - 11,867,873 119,271,442

LIC MF - Liquid Plus Plan (109,348,275 units were purchased and 780,703 units were reinvested and 103,760,000 units were sold during the year)

13,315,471 133,154,695 6,946,493 69,464,922

Birla Sunlife MF - Savings Fund Institutional Plan Daily Dividend (20,416,117 units were purchased, 251,641 units were reinvested and 37,276,676 units were sold during the year)

6,563,474 65,679,364 23,172,392 231,881,493

ICICI Prudential MF - Flexible Income Plan (193,428 units were reinvested and 22,405,493 units were sold during the year)

- - 22,212,065 234,859,269

HDFC Cash Management Fund Savings Plus Plan Dividend Reinvestment (22,010,666 units were purchased, 202,195 units were reinvested and 13,566,640 units were sold during the year)

13,291,332 133,332,002 4,645,111 46,597,430

Reliance Money Manager Fund (5,35,891 units were purchase, 2,346 units were reinvested and 438,047 units were sold during the year

100,190 100,303,853 - -

Sundaram BNP Paribas Ultra Short Term Fund (15,592,308 units were purchased, 39,947 units were reinvested and 15,632,255 units were sold during the year)

- - - -

UTI Treasury Advantage Fund (119,974 units were purchased, 448 units were reinvested and 41,591 units were sold during the year)

78,831 78,848,459 - -

IDFC Money Manager Fund (11,998,200 units were purchased, 47,141 units were reinvested and 2,999,550 units were sold during the year)

9,045,791 90,471,477 - -

Total 612,181,425 864,195,382Grand Total 612,184,425 864,198,382


b) Details of securities purchased and sold during the year:

(Number of units)

Security

As on

31.03.2009

Purchased during the year (Incl. dividend

reinvested)

Sold during the year

As on

31.03.2010

Sundaram BNP Paribas Ultra Short Term Fund - 15,632,255 15,632,255 -

7. (a) Sundry Debtors include following dues from firms/companies in which directors are interested:

(In Rupees)

ParticularsAs at

31.03.2010Maximum Amount

Outstanding

As at 31.03.2009

Maximum Amount

OutstandingInventurus Knowledge Solutions Pvt. Ltd. 2,941,993 19,394,143 - -Rare Enterprises 2,309,268 8,952,805 - -JP Morgan Asset Management India Pvt. Ltd. 29,919 58,343 - -

(b) The movement in provision for doubtful debts during the year is as follows:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Opening Balance 65,559,461 51,460,341Add: Provision made during the year 12,363,229 18,934,000Less: Bad debts written off against provision during the year 11,316,759 4,834,880Closing Balance 66,605,931 65,559,461

8. Sundry Creditors – Others include:

Particulars31.03.2010

(Rs.)31.03.2009

(Rs.)Amount payable to Managing Director 1,320,401 2,349,644Maximum amount payable to Managing Director at any time during the year 3,483,401 6,682,985

9. The disclosure with regard to dues to Micro and Small Enterprises are as follows:

ParticularsAmount

(Rs. in lakhs)Principal amount remaining unpaid to Micro and Small Enterprises as at the end of accounting year NilInterest due thereon NilAmount of interest paid by the Company along with the amount of the payment made to the supplier beyond the appointed day during the year NilAmount of interest due and payable for the period of delay in making payment (which have been paid, but beyond the appointed day) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006

Nil

Amount of interest accrued and remaining unpaid at the end of the accounting year NilUnpaid interest brought forward to current year Nil

Note: The above information has been provided to the extent such parties have been identified by the Company based on information available with it and has been relied upon by the auditors.

10. The amount of unclaimed dividends lying in separate bank accounts as at the balance sheet date is Rs.2,732,861/- (Previous Year: Rs.2,608,347/-). There is no amount due and outstanding as at the balance sheet date to be credited to the Investor Education and Protection Fund.


11. Notes on Cash Flow Statement:

a) The Cash Flow Statement has been prepared using the indirect method specified in Accounting Standard – 3 “Cash Flow Statements”.

b) Cash and cash equivalents at the balance sheet date include unclaimed dividends lying in separate bank accounts amounting to Rs. 2,732,861/- (Previous year : Rs. 2,608,347/-), not available for use by the Company.

c) The closing cash and cash equivalents excludes fixed deposits amounting to Rs.751,133,956/- (Previous Year: Rs.513,895,096/-), which is considered as part of investing activity by the Company.

12. Remuneration to Managing Director:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Salaries & Allowances 3,139,333 2,631,000Perquisites 156,401 163,943Commission 10,894,000 2,414,000Total 14,189,734 5,208,943

Note: Provisions for/contributions to employee retirement benefits, which are based on actuarial valuations done for the Company as a whole, are excluded from the above.

13. Payments to other directors:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Sitting fees 525,429 445,000

14. Computation of net profit under section 309(5) of the Companies Act, 1956 and commission payable to the Managing Director:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Profit before tax 817,155,017 202,633,972Add: Managerial remuneration (Refer Note 12) 14,189,734 5,208,943 Sitting fees to directors 565,429 445,000 Provision for doubtful debts/advances 12,363,229 18,934,000Less: Bad debts/advances written off against provision (11,316,759) (4,834,880) Dividend from long-term investments (106,720,063) (61,467,205)Net Profit 726,236,587 160,919,830Maximum remuneration payable to Managing Director – 5% of the net profit 36,311,830 8,045,992Commission payable @ 1.5% of Net Profit 10,894,000 2,414,000

Note: The remuneration paid/payable to the Managing Director for the year is within the limits specified in Sections 198/309 of the Companies Act, 1956.

15. Legal and professional fees include:

a) Remuneration to Statutory Auditors (excluding service tax):

Particulars 2009-10 (Rs.) 2008-09 (Rs.)For Statutory Audit 1,000,000 1,000,000For Tax Audit 125,000 125,000For Certifications 42,500 35,000For Quarterly Limited Reviews 300,000 300,000For Transfer Pricing Certification 125,750 -Out-of-pocket Expenses 29,498 36,016Total 1,622,748 1,496,016


b) Remuneration to Internal Auditors (excluding service tax):

Particulars 2009-10 (Rs.) 2008-09 (Rs.)For Audit 3,969,959 3,900,625Out-of-pocket Expenses 764,286 432,023Total 4,734,245 4,323,648

16. Expenditure in Foreign Currency:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Foreign Travel 214,376 9,487Software Charges 363,084 255,778Annual Maintenance Charges 857,328 1,046,759Website Charges 1,143,611 1,403,276Professional Charges 306,203 1,746,096Meetings & Seminars 108,150 -Sitting Fees 130,429 -Total 3,123,181 4,461,396

17. Earnings in Foreign Currency:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Dividend Nil 56,182,581

18. Advances due from companies under the same management, within the meaning of Section 370(1B) of the Companies Act, 1956:

(In Rupees)

ParticularsAs at

31.03.2010Maximum Amount

Outstanding

As at 31.03.2009

Maximum Amount

OutstandingGeojit Credits Private Limited 62,500,000 72,500,000 - -Geojit Investment Services Ltd. - 15,000,000 - -Geojit Technologies Private Ltd. - 3,364,042 - -Geojit Financial Management Services Pvt. Ltd. - - 100,000 100,000

19. Employee Benefits:

The details of benefits provided by the Company to its employees during the year are as follows:

I. Defined Contribution Plan – Provident Fund:

During the year, the Company has recognised the employer’s contribution to Employees Provident Fund Organisation amounting to Rs.3,573,049/- (Previous Year: Rs.3,827,962/-) in the Profit and Loss Account, included under the head Contribution to Provident & Other Funds in Schedule 14 – Employee Costs.

II. State Plans:

(a) Employer’s contribution to Employees’ State Insurance Scheme.

(b) Employer’s contribution to Employees’ Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profit and Loss Account, included in Schedule 14 - Employee Costs:

Particulars 2009-10 (Rs.) 2008-09 (Rs.)Employer’s contribution to Employees’ State Insurance Scheme 5,232,361 5,906,209Employer’s contribution to Employees’ Pension Scheme, 1995 6,631,081 7,168,424


III. Defined Benefit Plan – Gratuity:

The Company provides gratuity benefit to all eligible employees, which is funded with Life Insurance Corporation of India.

In accordance with Accounting Standard 15, actuarial valuation was done using the following assumptions:

Particulars 2009-10 2008-09

Discount Rate (per annum) 7.45% 6.80%

Rate of increase in compensation levels (per annum) 5% 5%

Expected return on plan assets (per annum) 8% 8%

Expected average remaining working lives of employees (years) 5.44 5.70

The estimate of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Other disclosures required under revised Accounting Standard - 15 are as follows:

(In Rupees)

Particulars 2009-10 2008-09

(A) Change in Present Value (PV) of obligation:

Opening PV of Obligation 10,688,396 7,534,519

Current service cost 2,302,433 1,942,660

Interest cost 834,037 692,568

Actuarial (gain) / loss on obligation (1,723,622) 768,558

Benefits paid (248,557) (249,909)

Past service cost – –

Closing PV of Obligation 11,852,687 10,688,396

(B) Change in the Fair Value (FV) Plan Asset:

Opening FV of Plan Asset 7,714,870 5,823,111

Expected return on Plan Assets 759,143 467,503

Actuarial gain / (loss) (49,169) 135,108

Contributions by the employer 3,165,060 1,539,057

Benefits paid (248,557) (249,909)

Closing FV of Plan Assets 11,341,347 7,714,870

(C) Reconciliation of Present Value (PV) of Obligation and Fair Value (FV) of Assets:

Closing PV of Obligation 11,852,687 10,688,396

Closing FV of Plan Assets 11,341,347 7,714,870

Funded Status [Surplus/(Deficit)] * (511,340) (2,973,526)

* - Included under the head “Employee Benefits” in Schedule 11 – Provisions


(D) Amounts recognised in Profit and Loss Account:

Current service cost 2,302,433 1,942,660

Interest cost 834,037 692,568

Expected return on Plan Assets (759,143) (467,503)

Actuarial (gains)/losses (1,674,453) 633,450

Past service cost – –

Net amount recognised in Profit and Loss Account * 702,874 2,801,175

* - Included in “Contribution to Provident & Other Funds” in Schedule 14 – Employee Costs

(E) Constitution of Plan Assets:

Equity instruments – –

Debt instruments – –

Property – –

Insurer managed asset * 11,341,347 7,714,870

* - The details with respect to the composition of investments in the fair value of plan assets have not been disclosed in the absence of the aforesaid information.

20. Related Party Disclosures:

A) Related Party Disclosures as per Accounting Standard - 18:

I) Nature of Relationships and Name of Related Parties:

Nature of Relationship Name of Related Party

Subsidiary Companies • Geojit Investment Services Limited Geojit Financial Management Services Pvt. Ltd.Geojit Technologies Private LimitedGeojit Financial Distribution Pvt. Ltd.Sigma Systems International FZ LLCGeojit Credits Private Ltd. (Partly owned)

Joint Ventures • Barjeel Geojit Securities LLC, United Arab EmiratesAloula Geojit Brokerage Company, Saudi ArabiaBNP Paribas Securities India Private Limited

Key Management Personnel • Mr. C.J. George, Managing Director

Relatives of Key Management Personnel • Ms. Shiny George, Wife of Mr. C.J. George

Entity having substantial interest in the Company • BNP Paribas S.A.

Entity over which Relative of Key Management Personnel has control

• Geojit Comtrade Limited

Note: As identified by the Management and relied upon by the Auditors.


II) Transactions with related parties during the year and balance outstanding at the end of the year:(In Rupees)

Nature of transaction

Subsidiary Companies Joint Ventures Key Management Personnel

Relatives of Key Management Personnel

Entity having substantial interest in the Company

Entity over which relative of KMP has

control

2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09

Marketing fees paid - - 126,516,000 55,637,904 - - - - - - - -

Research fees paid - - - 49,630,000 - - - - - - - -

Commission paid - - 352,533,827 30,196,000 - - - - - - - -

Software services availed 13,458,580 11,540,050 - - - - - - - - - -

Software purchased 25,321,918 6,802,700 - - - - - - - - - -

Sale of asset - 48,700 - - - - - - - - - -

AMC paid 1,729,500 - - - - - - - - - - -

Bank Charges Paid - - - - - - - - 10,027 - - -

Purchase of investments 500,000 160,000,000 - - - - - - - - - -

Salary and benefits - - - - 14,189,734 5,208,943 - - - - - -

Dividend paid - - - - 20,303,380 28,424,732 2,500,000 3,500,000 38,344,480 39,763,409 - -

Dividend received 106,719,742 5,258,315 - 56,182,581 - - - - - - - -

Fixed deposits placed - - - - - - - - - 290,256,124 - -

Fixed deposits redeemed - - - - - - - - - 290,256,124 - -

Interest received on fixed deposit - - - - - - - - - 322,575 - -

Loan availed 34,142,046 27,000,000 - - - - - - - -

Loan repaid 34,142,046 27,000,000 - - - - - - - -

Loan given 87,638,000 50,000,000 - - - - - - - - - -

Loan recovered 25,138,000 50,000,000 - - - - - - - - - -

Interest received 253,604 395,274 - - - - - - - - - -

Interest paid 43,519 117,371 - - - - - - - - - -

Asset Usage Charges recovered - - 736,478 2,905,993 - - - - - - - -

Expenses recovered 980,870 26,352,897 8,468,901 5,046,821 - - - - - - 952,495 -

Expenses reimbursed 1,571,573 2,506,852 142,325 147,510 - - - - - - 155,374 -

Rent Received - - - - - - - - - - 1,050,354 -

Cost recovery for shared services 1,224,000 - 6,994,391 - - - - - - - 20,597,163 5,624,165

Royalty - - - - - - - - - - 11,128,899 3,394,481

Debtors / Receivable 625,000,000 100,000 580,120 468,633 - - - - 33,697,383 - 5,562,100 9,018,646

Creditors / Payable - - 128,808,907 51,477,885 - 2,349,644 - - - - - -

Note: No amounts pertaining to related parties were written off or written back during the year.


B) Related Party Disclosures as per Listing Agreement entered into by the Company with Stock Exchanges:

(In Rupees)

ParticularsAs at

31.03.2010As at

31.03.2009Maximum amount

outstanding during the year2009-10 2008-09

Loans and Advances to Subsidiaries: Geojit Investment Services Limited Geojit Credits Private Limited Geojit Technologies Private Limited

–62,500,000

–

–––

15,000,00072,500,000

138,000

–50,000,000

–Loans and advances in the nature of loans where there is:(i) no repayment schedule: Geojit Investment Services Limited Geojit Credits Private Limited Geojit Technologies Private Limited(ii) no interest or interest below Section 372A of

the Companies Act, 1956.

–62,500,000

––

––––

15,000,00072,500,000

138,000–

–50,000,000

––

Loans and advances to companies/firms in which directors are interested

– – – –

Investments by the loanee in the shares of the Company when there is an existing loan

– – – –

21. Earnings per share is computed as follows:

Particulars 2009-10 2008-09Net profit after tax – In Rs. 571,542,602 145,187,794Profit attributable to Equity Shareholders – In Rs. (A) 571,542,602 145,187,794Total number of equity shares outstanding at balance sheet date 225,253,625 223,411,864Weighted average number of equity shares outstanding, considered for the purpose of computing Basic EPS (B) 224,198,856 212,040,748Add: Number of dilutive potential equity shares to be issued under Employee Stock

Option Plans (Previous Year: Number of potential equity shares to be issued under Employee Stock Option Plans and on conversion of warrants issued to BNP Paribas S.A. on preferential basis)

1,792,747 8,422,248

Weighted average number of equity shares outstanding, considered for the purpose of computing Diluted EPS (C) 225,991,603 220,462,996Basic Earnings Per Share – In Rs. (A/B) 2.55 0.68Diluted Earnings Per Share – In Rs. (A/C) 2.53 0.66Nominal value of Equity Shares – In Re. 1.00 1.00

22. Components of Deferred Tax Liability (Net) shown in the Balance Sheet is as follows:

(In Rupees)

ParticularsAs at

31.03.2009For the Year As at

31.03.2010Liability Items:Depreciation 22,284,000 (6,961,000) 15,323,000Asset Items:Provision for doubtful debts (22,284,000) 21,471,000 (813,000)Provision for employee benefits (1,666,000) (20,459,000) (22,125,000)Deferred Tax Liability/(Asset) (Net) (1,666,000) (5,949,000) (7,615,000)


23. (a) The details of Company’s interest as a venturer in Jointly Controlled Entities:

NameCountry of

IncorporationPercentage of ownership

interest31.03.2010 31.03.2009

Barjeel Geojit Securities LLC (Barjeel) United Arab Emirates 30% 30%Aloula Geojit Brokerage Company (Aloula) Saudi Arabia 28% 28%BNP Paribas Securities India Private Limited (BNPPSI) India 50% 50%

(b) The Company’s interest in the joint ventures are reported as long-term investments and are stated at cost. The Company’s share in the assets and liabilities as at the Balance Sheet date and in the incomes and expenses (without elimination of the effect of transactions between the Company and the joint ventures) for the year are as follows:

(In Rupees)

Particulars2009-10 2008-09

Barjeel Aloula BNPPSI Barjeel Aloula BNPPSI

ASSETS

Fixed & Intangible Assets (Net Block) 2,335,399 21,344,856 30,727,353 4,529,897 31,525,161 37,275,362

Investments – 71,184 – – – –

Current Assets, Loans & Advances:

Sundry Debtors 42,656,407 363,744 21,781,685 1,994,854 480,054 16,750,707

Cash & Bank 29,721,385 234,435,000 4,250 33,901,781 314,023,941 10,184

Loans & Advances 9,442,037 12,423,300 72,839,769 22,983,533 7,001,700 49,764,591

LIABILITIES

Secured Loan – – 105,583,000 – – 44,871,824

Current Liabilities & Provisions:

Liabilities 23,823,107 6,583,956 59,969,467 18,918,815 22,902,670 33,880,026

Provisions 2,767,229 1,439,124 10,612,794 2,542,688 – 1,650,000

INCOME

Income from Operations 63,849,270 1,418,248 196,266,695 42,622,711 9,525,901 79,154,976

Other Income 4,605,433 13,739,304 267,708 3,426,459 12,499,875 773,982

EXPENDITURE

Employee Costs 29,587,442 19,993,738 131,697,377 22,075,313 38,224,484 128,324,497

Operating Expenses 1,092,116 2,634,721 1,067,404 2,260,618 –

Establishment & Other Expenses 13,605,988 15,265,300 120,617,010 14,280,690 25,989,347 80,552,294

Depreciation / Amortisation 1,779,617 8,597,328 10,775,332 2,490,062 2,240,871 5,033,889

Finance Charges – – 7,656,172 – – 1,619,282

CONTINGENT LIABILITY Nil Nil Nil Nil Nil Nil


24. The details of assets under the Portfolio Management Scheme are as follows:

Particulars As at 31.03.2010 As at 31.03.2009Number of clients 333 380Original cost of assets under management – Rs. 453,146,680 537,545,801Represented by:(a) Bank balance – Rs. 99,054,787 23,244,849(b) Cost of portfolio holdings – Rs. 354,091,893 514,300,952Total 453,146,680 537,545,801Net asset value of portfolio under management – Rs. 590,116,027 340,392,490

25. The Company may allot shares between the balance sheet date and record date for the declaration of dividend pursuant to the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31st March 2010, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in the current year and will be considered in the appropriation for the next year. However, current year appropriation includes dividend paid on options exercised upto the record date for dividend declaration during the current year.

26. The Company’s operations predominantly relate to one segment, viz., broking and financial services, which constitutes more than 75% of the total revenues / results / assets of all segments combined. Other activities which are not related to the main business of broking and financial services do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Company’s operations are located only in India and hence, separate secondary geographical segment information is not disclosed.

27. The Company had changed its name to Geojit BNP Paribas Financial Services Limited w.e.f. 1st April 2009, which was approved by the Registrar of Companies, Kerala.

28. Previous year’s figures have been regrouped / reclassified wherever necessary to conform to current year’s classification.

Schedules 1 to 18 form an integral part of the Accounts.Signatures to Schedules 1 to 18.


Jayaraj T. A.P. Kurian C.J. GeorgeCompany Secretary Chairman Managing Director

Place: KochiDate: 28th May, 2010


PART IV OF SCHEDULE VI OF THE COMPANIES ACT 1956.BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

01 REGISTRATION DETAILS

Registration No:State Code :Balance Sheet Date:

L67120KL1994PLC008403 9

31103/2010

02 CAPITAL RAISED DURING THE YEAR(AMOUNT IN Rs. THOUSANDS)

Public IssueRights IssueBonusPrivate Placement

NILNILNIL

1,842

03 POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS(AMOUNT IN Rs. THOUSANDS)

Total LiabilitiesTotal Assets

3,190,348

3,190,348

SOURCES OF FUNDS

Paid up CapitalReserves and SurplusEmployee stock options outstanding

225,254 2,946,259

18,835

APPLICATION OF FUNDS

Net Fixed AssetsInvestmentsCapital work-in-ProgressNet Current AssetsDeferred Income Tax Asset

400,967 1,252,855

28,260 1,500,651

7,615

04 PERFORMANCE OF THE COMPANY(AMOUNT IN Rs. THOUSANDS)

Turnover/Other IncomeTotal ExpenditureProfit before TaxProfit afterEarnings Per Share (Rs.)Dividend Rate

2,880,589 2,063,434

817,155 571,543

2.55 75%

05 GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF THECOMPANY (AS PER MONETARY TERMS)

Item Code No. (ITC Code) 80803Product Description: Stock & share Broking, Depository Service Portfolio Management


To

The Board of Directors of Geojit BNP Paribas Financial Services Limited

1. We have audited the attached Consolidated Balance Sheet of Geojit BNP Paribas Financial Services Limited (“the Company”), its subsidiaries and jointly controlled entities (the Company, its subsidiaries and jointly controlled entities constitute “the Group”) as at 31st March, 2010, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. The Consolidated Financial Statements include investments in subsidiaries accounted in accordance with Accounting Standard 21 (Consolidated Financial Statements) and jointly controlled entities accounted in accordance with Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures), as notified under the Companies (Accounting Standards) Rules, 2006. These financial statements are the responsibility of the Company’s Management and have been prepared on the basis of the separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of four subsidiaries and one jointly controlled entity, whose financial statements reflect total assets of Rs.15,118 lakhs as at 31st March, 2010, total revenues of Rs.4,197 lakhs and net cash inflows amounting to Rs.1,680 lakhs for the year ended on that date as considered in the Consolidated Financial Statements. These financial statements have been audited by other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these subsidiaries and jointly controlled entities is based solely on the reports of the other auditors.

4. The Consolidated Financial Statements include the unaudited financial statements of one subsidiary and one jointly controlled entity, whose financial statements reflect total assets of Rs.2,780 lakhs as at 31st March, 2010, total revenues of Rs.250 lakhs and net cash outflows amounting to Rs.762 lakhs for the year ended on that date.

5. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements) and Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006.

6. Based on our audit, and on consideration of the separate audit reports on individual financial statements of the Company, the subsidiaries and jointly controlled entities, and to the best of our information and according to the explanations given to us, in our opinion, subject to our comments in paragraph 4 regarding inclusion of unaudited financial statements relating to one subsidiary and one jointly controlled entity, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2010;

(ii) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the year ended on that date; and

(iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.


(Registration No.008072S)

M. RamachandranPartner

Kochi, 28th May, 2010 (Membership No. 16399)

AUDITORS’ REPORT


CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010

Schedules 1 to 19 form an integral part of the Consolidated Accounts. In terms of our report attached.





(In Rupees)

Particulars Sch. No.

As at31-03-2010

As at31-03- 2009

SOURCES OF FUNDS Shareholders' Funds Share Capital 1 225,253,625 223,411,864 Employee Stock Options Outstanding 2 18,835,299 14,712,153 Reserves & Surplus 3 3,692,000,506 3,066,447,601

3,936,089,430 3,304,571,618 Loan Funds Secured Loans 4 105,583,000 44,871,824

105,583,000 44,871,824 Capital reserve on consolidation of Subsidiary 482,094 482,094 Minority Interest in Subsidiaries 333,254,930 92,869,257

TOTAL 4,375,409,454 3,442,794,793

APPLICATION OF FUNDS Goodwill on consolidation of Joint Venture 2,262,486 371,442 Goodwill on consolidation of Foreign Subsidiary 2,330,730 2,451,097 Fixed Assets 5Gross Block 835,750,837 786,911,909 Less: Accumulated Depreciation 367,153,785 245,088,776

468,597,052 541,823,133 Capital Work-in-progress 28,259,771 3,638,383 Net Block 496,856,823 545,461,516 Investments 6 1,374,853,297 1,203,923,455 Deferred Tax Assets 8,711,710 2,662,634 Current Assets, Loans & Advances Sundry Debtors 7 1,176,738,147 452,135,051 Cash & Bank Balances 8 2,683,214,754 2,191,279,558 Other Current Assets 9 40,197,596 18,765,441 Loans & Advances 10 1,534,917,485 1,166,873,423

5,435,067,982 3,829,053,473 Less: Current Liabilities & Provisions Liabilities 11 2,704,184,358 1,976,370,156 Provisions 12 240,489,216 164,758,668

2,944,673,574 2,141,128,824 Net Current Assets 2,490,394,408 1,687,924,649

TOTAL 4,375,409,454 3,442,794,793 Significant Accounting Policies and Notes on Accounts 19


Schedules 1 to 19 form an integral part of the Consolidated Accounts. As per our report attached.





CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010(In Rupees)

Particulars Sch. No. Year Ended Year Ended 31-03-2010 31-03-2009

Income Income from Operations 13 2,801,141,156 1,749,765,747 Other Income 14 240,011,434 170,055,495

3,041,152,590 1,919,821,242 Expenditure Employee Costs 15 729,069,691 683,410,597 Operating Expenses 16 812,460,296 477,172,248 Establishment & Other Expenses 17 581,905,736 521,237,228 Interest 18 8,106,623 4,884,118 Depreciation 5 141,594,608 117,532,246

2,273,136,954 1,804,236,437 Profit Before Tax 768,015,636 115,584,805 Provision for Tax: - Current 282,539,096 133,458,766 - Deferred (Refer Note 7 of Schedule 19) (6,049,076) (7,134,315) - Fringe Benefit Tax - 5,406,340 - MAT Credit availed - (26,982,601) - Earlier Years' Income Tax 7,768,798 57,470

284,258,818 104,805,660 Profit After Tax 483,756,818 10,779,145 Add: Extraordinary Item - 400,000,000 Less: Pre-acquisition profit adjusted - (2,408,624)Less: Minority Interest in Subsidiaries 21,989,018 (8,184,229)Net Profit For The Period 461,767,800 400,186,292 Balance brought forward from Previous Year 996,811,748 746,766,121 Foreign Exchange Translation Adjustment (7,184,268) 14,262,500 Less: Minority Interest's share in profits brought forward adjsuted (10,047,988) - Profit Available For Appropriation 1,441,347,292 1,161,214,913 Less: Appropriations Transfer to General Reserve 57,200,000 30,000,000 Proposed Dividend on Equity Share Capital 168,940,219 111,705,932 Corporate Dividend Tax 28,058,859 18,151,809 Corporate Dividend Tax credit for Previous Year (18,079,509) - Transfer to Statutory Reserve - NBFC 2,086,619 3,044,263 Corporate Dividend Tax on interim dividend in a Subsidiary 16,995,000 - Corporate Dividend Tax on proposed dividend in a Subsidiary - 1,142,020 Share of profit to Co-venturer in a Joint Venture 861,186 - Dividend paid on shares allotted under ESOP Schemes 338,399 359,141

256,400,773 164,403,165 Balance Carried to Schedule 3 1,184,946,519 996,811,748 Earnings Per Share (Equity shares of face value Re.1/- each) (Refer Note 6 of Schedule 19) Before Exra-ordinary Item: Basic 2.06 0.00 Diluted 2.04 0.00 After Extra-ordinary Item: Basic 2.06 1.89 Diluted 2.04 1.82 Significant Accounting Policies and Notes on Accounts 19


(In Rupees)Particulars 2009-10 2008-09

CASH FLOWS FROM OPERATING ACTIVITIES Profit Before Tax 768,015,636 115,584,805 Add/(Less): Depreciation / Amortisation 141,594,608 117,532,246 Provision for doubtful debts 12,363,229 24,138,000 Deferred employee compensation written off 4,123,146 5,426,266 Interest expense 8,106,623 4,884,118 Loss on sale / write off of Fixed Assets 8,937,558 9,047,319 Loss in value of Mutual Funds - 87,250 Pre-acquisition profit on increase in stake in a subsidiary - (2,408,624) Dividend from current non-trade investments (47,818,445) (45,405,503) (Profit)/Loss on sale of current non-trade investments (7,803) (8,538,180) Interest earned on fixed deposits (94,870,306) (77,515,720) Dividend from long term non-trade investments (321) (26,310) Cash flow before Changes in Working Capital 800,443,925 142,805,667 Adjustments for changes in Working Capital: (Increase)/Decrease in Debtors (736,966,326) 233,173,535 (Increase)/Decrease in Loans & Advances (283,550,554) 169,358,868 Increase/(Decrease) in Current Liabilities 727,689,689 (170,453,139) Increase/(Decrease) in Provisions 10,291,075 6,587,972 Cash generated from Operations 517,907,809 381,472,903 Income tax including fringe benefit tax paid (net of refunds) (374,528,632) (91,914,505) Cash flows from Operating Activities 143,379,177 289,558,398 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (83,123,413) (311,339,130) Sale of fixed assets 5,817,328 3,866,609 (Increase)/Decrease in capital advances (24,621,388) 13,664,892 Compensation received for cessation of commodity business - 400,000,000 Purchase of current non-trade investments (4,109,584,981) (3,705,644,653) Capital reserve on increase in stake in a subsidiary - 456,494 (Increase)/Decrease in fixed deposits with banks (221,168,943) (482,167,211) Sale of current non-trade investments 3,938,662,934 3,573,120,003 Dividend on current non-trade investments 47,818,445 45,405,503 Dividend on long term non-trade investments 321 26,310 Interest received on fixed deposits 73,438,151 63,895,427 Cash used in Investing Activities (372,761,546) (398,715,756) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from conversion of warrants to equity shares - 13,910,514 Share premium received on conversion of warrants - 295,737,528 Proceeds from allotment of shares under ESOP 33,348,454 5,020,390 Proceeds from further issue of shares by a subsidiary 600,000,000 - Dividend paid to minority interest in a subsidiary (4,227,130) - Dividend paid on equity share capital (111,919,817) (145,542,192) Corporate dividend tax paid (19,041,934) (24,924,587) Loans availed / (repaid) (Net) 60,711,176 (115,579,732) Interest paid (8,106,623) (4,884,118) Cash flows from (used in) Financing Activities 550,764,126 23,737,803 Net Increase / (Decrease) in Cash and Cash Equivalents 321,381,757 (85,419,555) Add: Opening Cash & Cash Equivalents # $ 1,295,610,029 1,054,880,079 Add: Share of Cash & Cash Equivalents in a Joint Venture - 314,034,125 Add: Opening Cash & Cash Equivalents on increase in stake in a Subsidiary - 2,633,530 Add / (Less): Foreign Currency Translation Adjustment (50,615,504) 9,481,850 Closing Cash & Cash Equivalents # $ 1,566,376,282 1,295,610,029 Significant Accounting Policies and Notes to Accounts - Schedule 19 # - Includes Clients' balances in current accounts with banks. $ - Refer Note 4 of Schedule 19.

CONSOLIDATED CASH FLOW STATEMENT

Schedules 1 to 18 form an integral part of the Accounts. As per our report attached. For Deloitte Haskins & Sells Chartered Accountants


M. Ramachandran A. P. Kurian C. J. George Partner Chairman Managing Director Place: Kochi Place: Kochi T. Jayaraj Date: 28th May 2010 Date: 28th May 2010 Company Secretary


(In Rupees)

Particulars As at

31-03-2010

As at

31-03-2009 Schedule 1: Share Capital Authorised 250,000,000 Equity shares of Re.1/- each 250,000,000 250,000,000 (Previous Year: 250,000,000 Equity shares of Re.1/- each) 250,000,000 250,000,000 Issued, Subscribed, Called-up and Paid-up 225,253,625 Equity shares of Re.1/- each 225,253,625 223,411,864 (Previous Year: 223,411,864 Equity shares of Re.1/- each) 225,253,625 223,411,864

Schedule 2: Employee Stock Options Outstanding Employee stock options outstanding 28,217,194 28,408,471 Less: Deferred employee compensation expense 13,505,041 19,122,584 Less: Employee compensation expense amortised (4,123,146) (5,426,266)

(9,381,895) (13,696,318) 18,835,299 14,712,153

Schedule 3: Reserves & Surplus Securities Premium As per last Balance Sheet 1,770,999,430 1,414,574,278 Add: Received during the year in a subsidiary company 387,375,001 - Add: Received on conversion of warrants during the year - 347,762,850 Add: Received on allotment of shares under ESOP 31,506,693 8,662,302

2,189,881,124 1,770,999,430 Capital Reserve As per last Balance Sheet 33,345,030 - Add: Application money received on warrants expired - 33,345,030

33,345,030 33,345,030 Statutory Reserves (i) In Subsidiary:As per last Balance Sheet 7,257,425 4,815,318 Add: Transfer from Profit and Loss Account 2,086,619 2,442,107

9,344,044 7,257,425 (ii) Share in Joint Venture As per last Balance Sheet 10,635,000 8,190,000 Add/(Less): Restatement of opening balance (1,522,500) 2,445,000

9,112,500 10,635,000 18,456,544 17,892,425

Foreign Currency Translation Reserve As per last balance sheet 74,526,063 (1,309,572) Translation adjustment for the year (39,227,679) 75,835,635

35,298,384 74,526,063 General Reserve As per last Balance Sheet 172,872,905 142,872,905 Add: Transfer from Profit and Loss Account 57,200,000 30,000,000

230,072,905 172,872,905

Profit and Loss Account 1,184,946,519 996,811,748

3,692,000,506 3,066,447,601 Schedule 4: Secured Loans Share in Joint Ventures 105,583,000 44,871,824

105,583,000 44,871,824

SCHEDULES ATTACHED TO AND FORMING PART OF CONSOLIDATED ACCOUNTS


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(In Rupees)

Particulars As at

31-03-2010As at

31-03-2009Schedule 6: Investments Long Term Investments - At cost Unquoted, Non-trade 400 (Previous Year: 400) 'C' class shares of Rs. 500/- each in Muvattupuzha Co-operative Super Speciality Hospital Limited

200,000 200,000

5 (Previous Year: 5) shares of Rs.10,000/- each in First Commodities 75,000 75,000 Exchange of India Ltd. 11,401 (Previous Year: 11,401) equity shares of Re.1/- each, fully paid-up, in Bombay Stock Exchange Ltd.

877 877

100 (Previous Year: 100) equity shares of Rs.10/- each, fully paid-up, in Cochin Stock Exchange Ltd.

1,000 1,000

276,877 276,877 Current Investments - At lower of cost and nest asset/ fair value Unquoted, Non-trade In Mutual Funds & Government Securities 1,374,505,236 1,203,646,578 Share in Joint Ventures 71,184 -

1,374,576,420 1,203,646,578 1,374,853,297 1,203,923,455

Aggregate cost of unquoted investments 1,374,853,297 1,203,923,455 Aggregate net asset / market value of mutual fund investments 1,375,177,704 1,203,651,390

Schedule 7: Sundry Debtors - Unsecured, unless stated otherwise Considered Good Client balances outstanding for a period exceeding six months 105,493,636 19,506,060 Other Client balances 661,099,084 386,003,905 Client balances- Margin Funding Loan Receivable (Secured) 185,142,582 30,904,533 Dues from Stock Exchanges 161,838,368 8,141,757

1,113,573,670 444,556,255 Considered Doubtful Client balances outstanding for a period exceeding six months 67,026,631 60,814,180 Other Client balances 6,059,291 11,813,732

73,085,922 72,627,912 Less: Provision for doubtful debts 73,085,922 72,627,912

- - Share in Joint Ventures 63,164,477 7,578,796

1,176,738,147 452,135,051

Schedule 8: Cash & Bank Balances Cash in hand 708,190 337,707 Balances with Scheduled Banks: - in Current Accounts 90,601,715 66,767,318 - in Current Accounts - Clients 1,208,172,881 877,343,987 - in Current Accounts - Unclaimed Dividend 2,732,861 2,608,347 - in Fixed Deposit Accounts 1,116,838,472 895,669,529 Balances with Other Banks - 616,764 Share in Joint Ventures 264,160,635 347,935,906

2,683,214,754 2,191,279,558



(In Rupees)

Particulars As at

31-03-2010As at

31-03-2009Schedule 9: Other Current Assets Interest accrued on fixed deposits 40,197,596 18,765,441

40,197,596 18,765,441 Schedule 10: Loans & Advances Secured and Considered Good: Loans 234,316,507 97,973,062 Unsecured and Considered Good: Advances recoverable in cash or in kind or for value to be received 28,386,935 36,835,291 Advance to staff 446,863 534,354 Advance income tax 84,525,472 3,574,703 Advance fringe benefit tax 14,773 - Income tax paid under protest, pending in appeal 22,813,214 13,706,248

136,187,257 54,650,596 Deposits & Margins with Stock & Commodity Exchanges 1,005,672,928 831,751,663 Deposits with Government authorities 3,158,767 2,315,980 Other deposits 80,157,883 84,789,976

1,088,989,578 918,857,619 MAT credit entitlement 21,403,601 26,982,601 Share in Joint Ventures 54,020,542 68,409,545

1,534,917,485 1,166,873,423 Schedule 11: Current Liabilities Sundry Creditors: - Micro and Small Enterprises - - - Clients 2,308,757,886 1,692,781,614 - Stock/Commodity Exchanges 1,467,937 20,588,111 - Others 257,380,046 146,683,104 Security deposit from Business Associates 16,508,706 17,673,150 Statutory liabilities 22,608,869 24,533,629 Investor Education & Protection Fund shall be credited by: - Unpaid dividend 2,732,861 2,608,347 Other liabilities 6,899,228 6,243,142 Overdrawn Scheduled Bank Current Account - 12,100 Share in Joint Ventures 87,828,825 65,246,959

2,704,184,358 1,976,370,156 Schedule 12: Provisions Employee Benefits 7,209,999 7,030,188 Warranties 114,720 607,915 Income tax 21,302,124 20,843,530 Fringe benefit tax 24,448 210,272 Wealth tax 19,700 41,700 Proposed dividend on: - Equity share capital 168,940,219 111,705,932 - Corporate dividend tax 28,058,859 18,984,423 Corporate dividend tax in a subsidiary - 1,142,020 Share in Joint Ventures 14,819,147 4,192,688

240,489,216 164,758,668



(In Rupees)

Particulars Year Ended Year Ended31-03-2010 31-03-2009

Schedule 13: Income from Operations Brokerage (Equity) 2,319,804,510 1,213,418,285 Brokerage (Commodities) - 92,927,656 Financial products distribution 96,227,251 118,740,990 Depository services 100,659,390 74,474,335 Portfolio management services 14,983,601 10,894,561 Software Consultancy & Development 65,882,222 49,959,937 Interest from Margin Funding 40,143,573 48,996,049 Overdue fees collected from Clients 101,107,245 51,753,477 Brokerage (Real estate business) 266,564 - Other operational income 17,778,473 13,901,240 Share in Joint Ventures 44,288,327 74,699,217

2,801,141,156 1,749,765,747 Schedule 14: Other Income Income from long-term, non-trade investments 321 26,310 Dividend on current, non-trade investments 47,818,445 45,405,503 Profit on sale of current non-trade investments 7,803 8,538,180 Interest earned on fixed deposits 94,870,306 77,515,720 Cost recovery for shared services 28,666,660 5,624,165 Royalty 11,128,899 3,394,481 Infrastructure usage fees 29,537,915 - Miscellaneous income 9,368,639 12,850,817 Share in Joint Ventures 18,612,446 16,700,319

240,011,434 170,055,495 Schedule 15: Employee Costs Salaries, Allowances & Bonus 507,487,938 451,401,331 Contribution to Provident & Other funds 12,452,160 16,608,627 Staff welfare expenses 27,851,036 26,776,413 Share in Joint Ventures 181,278,557 188,624,226

729,069,691 683,410,597 Schedule 16: Operating Expenses Business associates' commission (Equity) 546,639,619 223,493,255 Marketing Incentive 18,260,891 29,345,501 Marketing fees 88,561,200 38,946,533 Business associates' commission (Distribution) 14,886,268 25,199,991 Depository charges 17,270,608 10,362,665 Connectivity charges 75,447,229 74,629,661 Research expenses 9,864,001 32,376,999 Loss on sale of stock-in-error 5,390,000 5,579,491 Postage charges - Contract Note 14,198,140 12,057,100 Transaction charges 124,797 834,931 Insurance - NSE, BSE & NSDL 1,623,008 1,872,255 SEBI Registration fees 60,000 1,638,283 Registration & Renewal fees 1,264,861 3,901,030 Miscellaneous expenses 15,142,837 13,607,088 Share in Joint Ventures 3,726,837 3,327,465

812,460,296 477,172,248



(In Rupees)

Particulars Year Ended Year Ended31-03-2010 31-03-2009

Schedule 17: Establishment & Other Expenses Rent for premises 116,256,523 107,164,793 Advertisement 48,801,943 42,731,708 Telephone expenses 41,220,217 37,826,825 Electricity charges 37,607,694 32,961,285 Postage 17,387,299 18,681,163 Software charges 3,732,320 3,661,258 Repairs & Maintenance - Leasehold Building 4,781,861 2,510,954 - Others 31,982,790 24,456,845 Printing & Stationery 17,170,847 15,359,714 Travel & Conveyance expenses - Directors 4,437,455 1,893,415 - Others 14,186,024 16,831,252 Legal & Professional fees 19,074,965 17,522,723 Office expenses 10,050,297 7,850,990 Provision for doubtful debts (Net) 12,363,229 24,138,000 Bad debts 399,099 1,131,802 Business promotion expenses 12,717,411 6,629,043 Bank guarantee commission 4,603,684 8,445,288 Meeting & Seminar expenses 4,567,537 1,430,255 Rates & Taxes 5,260,747 6,236,408 Subscriptions 4,111,472 3,426,107 Bank charges 580,063 855,699 Loss on sale / write off of fixed assets 8,937,558 9,047,319 Loss in value - Mutual funds - 87,250 Insurance - others 1,598,014 2,260,914 Sitting fees to directors 735,429 600,000 Donation 2,640,350 173,750 Listing fees 110,750 102,435 Registrar & Transfer expenses 162,243 864,396 Consultancy fees 556,000 276,000 Miscellaneous expenses 7,024,229 6,709,681 Share in Joint Ventures 148,847,686 119,369,956

581,905,736 521,237,228 Schedule 18: Finance Charges Interest on loans other than fixed loans 450,451 3,264,836 Share in Joint Ventures 7,656,172 1,619,282

8,106,623 4,884,118



SCHEDULE 19: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. Principles of Consolidation Consolidated Financial Statements of Geojit BNP Paribas Financial Services Limited Group (hereinafter referred to

as “the Group”) have been prepared in accordance with Accounting Standard 21 (AS 21) “Consolidated Financial Statements” and Accounting Standard 27 (AS 27) “Financial Reporting of Interests in Joint Ventures”, as notified under the Companies (Accounting Standards) Rules, 2006.

The financial statements of the subsidiaries and joint ventures used in the consolidation are drawn upto the same reporting dates as that of the Company, viz., 31st March 2010.

The consolidated financial statements have been prepared by applying uniform accounting policies for like transactions and events in similar circumstances and appropriate adjustments are made if the differences in accounting policies have a material impact.

The financial statements of the Company and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, incomes and expenses, after fully eliminating intra-group balances and transactions resulting in unrealized profit / loss. Distributions received from the investee are reduced from the carrying amount of investment. The interest of the Company in jointly controlled entities have been consolidated using ‘proportionate consolidation’ method, which requires the venturer’s share of assets and liabilities, and incomes and expenses in such entities to be included in the Consolidated Balance Sheet and Consolidated Profit and Loss Account respectively as separate line items.

The excess of cost of investment over the Company’s share in the net assets of the subsidiary or jointly controlled entity at the date on which investment is made is recognised as ‘goodwill’ and the excess of Company’s share in the net assets of the subsidiary or jointly controlled entity over the cost of investment at the date on which investment is made is recognised as ‘capital reserve’, and is separately disclosed in the consolidated financial statements.

B. Significant Accounting Policies

Accounting Convention The financial statements are prepared under the historical cost convention on accrual basis and in accordance with the

Companies Act, 1956, and the Accounting Standards specified in Rule 3 of Companies (Accounting Standards) Rules, 2006.

Use of Estimates The preparation of the financial statements in conformity with the accounting standards generally accepted in India

requires, the management to make estimates that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates.

Fixed Assets and Depreciation Fixed assets are stated at cost less accumulated depreciation. Cost includes cost of purchase and other costs

attributable to bringing the assets to working condition for intended use. Depreciation on fixed assets, other than improvements to leasehold premises and V-Sat equipments, capitalised upto

31st March 2007 is provided under the straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. Fixed assets, other than improvements to leasehold premises and V-Sat equipments, acquired on or after 1st April 2007 are depreciated under the straight line method over the useful life estimated by the management, which are lower than the useful life considered in Schedule XIV, as follows:

Asset Useful Life (In years)Building 40Furniture and Fixtures 5Electrical Equipments 5Office Equipment 5Computers - Data Center Equipments 5Computers - Other than Data Center Equipments 3Vehicles 5

SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010


Improvements to leased office premises are depreciated over a period of 5 years irrespective of the lease period, on the assumption that lease agreements will be renewed and the premises will be occupied for a minimum period of five years. If the premises are vacated before the expiry of five-year period, the un-amortised leasehold improvement costs are fully written off in the year of vacation. V-Sat equipments are depreciated over a period of 5 years.

Additions to fixed assets are depreciated from the date of addition and deletions are depreciated upto the date of sale, on pro-rata basis.

Intangible Assets and Amortisation Computer software is considered as intangible asset. Computer software capitalised upto 31st March 2007 are

amortised over a period of 6 years and software capitalised on or after 1st April 2007 are amortised over a period of 5 years.

Investments Investments are classified as long-term or current based on their nature and intended holding period. Long-term

investments are stated at cost less provision for diminution, other than temporary, in value. Current investments are stated at lower of cost and market value / net asset value.

Income Brokerage income is recognized on the trade date of transaction, upon confirmation of the transactions by stock/

commodity exchanges and clients. Income from depository services, penal charges and portfolio management services are recognised on the basis of agreements entered into with clients and when the right to receive the income is established. Commission income from financial products distribution is recognised on the basis of agreement entered with principals and when the right to receive the income is established. Interest income from margin funding business is recognised on loans given to clients on time proportion basis. Other interest incomes are recognised on time proportion basis. Dividend income is recognised when the right to receive the income is established. Software development revenue is recognised on completion of different stages of software development.

Employee Benefits Post-employment Benefit Plans Contributions to defined contribution retirement benefit schemes are recognised as expense when employees have

rendered services entitling them to contributions. For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with

actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the profit and loss account of the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered

by employees is recognised during the period when the employees renders the service. These benefits include compensated absences such as paid annual leave and performance incentives.

Long-term employee benefits Compensated absences which are not expected to occur within the twelve months after the end of the period in which

the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date.

Leases Operating lease rentals are charged to Profit and Loss Account of the period to which they relate.

Taxes on Income Current tax is determined on the taxable income for the year as per the provisions of the Income Tax Act, 1961. Fringe benefit tax is determined on the fringe benefit values as per the provisions of the Income tax Act, 1961.


Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such asset items can be realised.

Impairment of Assets Impairment is ascertained at each Balance Sheet date in respect of the Company’s fixed assets. An impairment loss

is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value, based on an appropriate discount factor. Reversal of impairment loss is recognised as income in the Profit and Loss Account.

Provisions, Contingent Liabilities and Contingent Assets A Provision is recognized, in terms of Accounting Standard 29 – ‘Provisions, Contingent Liabilities and Contingent

Assets’ notified by the Companies (Accounting Standards) Rules, 2006, when there is a present obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation, which can be reliably estimated. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the best current estimate.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events, due to occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the Company, or where any present obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the financial statements.

Employee Stock Option The employee share based compensation costs under the Employee Stock Option Schemes are accounted under

the intrinsic value method, wherein the difference between the market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period.

C. Details of Subsidiaries included in the consolidated financial statements:

Name of Subsidiary Company

Country of Incorporation

Share in ownership & voting power

Shares held by

2009-10 2008-09Geojit Investment Services Limited

India 100 % 100 % Geojit BNP Paribas Financial Services Limited

Geojit Technologies Private Limited

India 65 % 100 % Geojit Investment Services Limited

Geojit Financial Distribution Private Limited.

India 100 % 100 % Geojit Investment Services Limited

Geojit Financial Management Services Private Limited

India 100% 100% Geojit BNP Paribas Financial Services Limited

Geojit Credits Private Limited

India 65.03% 65.03% Geojit BNP Paribas Financial Services Limited

Sigma Systems International FZ LLC

United Arab Emirates

100% 100% Geojit Technologies Private Limited


D. Details of Joint Ventures included in the consolidated financial statements: (a) Company’s interest in Joint Ventures:

Name of Joint Venture Country of Incorporation Share in ownership & voting power2009-10 2008-09

Barjeel Geojit Securities LLC United Arab Emirates 30% 30%Aloula Geojit Brokerage Company Saudi Arabia 28% 28%BNP Paribas Securities India Private Limited India 50% 50%

(b) The Company’s interest in the joint ventures are reported as long-term investment and stated at cost in the standalone financial statements.

(C) The joint venture company, Barjeel Geojit Securities LLC (‘Barjeel Geojit’), has entered into a joint venture agreement with Global Financial Investments S.A.O.G., Muscat, Sultanate of Oman, on 20th July 2004, wherein Barjeel Geojit has 65% interest. The Profit and Loss Account of Barjeel Geojit includes the results of operation of the said joint venture. The “Share of profit to Co-venturer in a Joint Venture” in the Consolidated Profit and Loss Account represents the 35% interest of Global Financial Investments S.A.O.G. in the results of operation of the said joint venture during the year.

(d) The Company has adopted the revised Accounting Standard 11, “The Effects of Changes in Foreign Exchange Rates” issued by The Institute of Chartered Accountants of India for consolidating its interest in the joint ventures. As required by the Standard, the exchange gain / loss on translation of financial statements of the joint ventures for the purpose of consolidation is taken to Foreign Currency Translation Reserve and disclosed separately in the Consolidated Balance Sheet.

E. Notes to Accounts 1. Contingent Liability:

ParticularsAs at

31.03.2010 (Rs.)As at

31.03.2009 (Rs.)Claims against the Company not acknowledged as debts: Legal suits filed against the Company / Matters under Arbitration 29,015,320 19,761,403Income tax demands, pending in appeal 18,538,052 18,813,214Service tax demands, pending in appeal 486,523 643,298

2. Details of utilisation of the proceeds from the allotment of equity shares to BNP Paribas S.A. on preferential basis:

Particulars Amount (Rs.)Amount pending utilisation as on 1st April 2009 441,097,787Less: Utilisation during the year:For Business Expansion 101,715,424For Investment in Subsidiaries 500,000Balance pending utilization as on 31st March 2010 338,882,363Amount pending utilization as on 31st March 2010 has been invested as follows:In Mutual Funds 338,882,363

3. (a) Employee Stock Option Plan – 2005 (ESOP-2005): The Company introduced Employee Stock Option Plan-2005 (ESOP-2005) during 2005-06, under which options

for 6,989,400 equity shares of Re.1/- each were granted to eligible permanent employees and non-executive directors, including independent directors but excluding promoters, of the Company and its Subsidiaries. The scheme was approved by the Shareholders at the Extra-ordinary General Meeting held on 7th March 2006 and by the Compensation Committee of Directors on 7th March 2006. The options will vest over a period of 4 years from the date of grant, viz., 7th March 2006, as follows:

End of Year Date of Vesting % of options grantedII 7th March 2008 30%III 7th March 2009 30%IV 7th March 2010 40%


The exercise period commences from the date of vesting and will expire not later than 5 years from the date of grant, viz., 6th March 2011. The exercise price has been computed by giving discounts, based on the grade and number of years of service rendered by the employees and directors, to the market price on the date prior to grant date.


The intrinsic value of 6,989,400 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of four years net of actual forfeiture upto the balance sheet date is Rs.11,027,018/- (Previous Year: Rs. 11,195,621/-) and the proportionate amount amortised during the year is Rs.809,050/- (Previous Year: Rs. 2,091,469/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs. 6,549,205/- (Previous Year: Rs. 16,847,469/-).

Further disclosures on ESOP-2005 are given below: (i) Grantee-wise details of ESOPs granted:

Class of Grantees Directors Managers and Above Other EmployeesDate of grant 07.03.2006 07.03.2006 07.03.2006Number of options granted 300,000 3,879,400 2,810,000Contractual life:

30% of 6,989,400

30% of 6,989,400

40% of 6,989,400

2 years

3 years

4 years

2 years

3 years

4 years

2 years

3 years


may be formulated by the Compensation Committee from time to time.Method of settlement In Cash In Cash In Cash


Class of Grantees

Directors Managers and Above Other EmployeesNo. of

OptionsWeighted

Avg. Exercise

Price (Rs.)

No. of Options

Weighted Avg.


No. of Options

Weighted Avg.


No. of options outstanding at year beginning 204,000 18.86 2,878,050 17.75 2,176,190 17.94No. of options granted - - - - - -No. of options forfeited 42,000 18.86 37,280 17.75 61,800 17.94No. of options exercised 102,000 18.86 875,980 17.75 815,790 17.94No. of options outstanding at year end 60,000 18.86 1,964,790 17.75 1,298,600 17.94No. of options exercisable at year end 60,000 18.86 1,964,790 17.75 1,298,600 17.94


Class of GranteesWeighted Average Fair Values (Rs.)

Directors 17.23Managers and Above 17.27Other Employees 17.30


The fair values were calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.19.86, weighted average exercise price as per above, volatility in the market price (of the Company’s share over the one year prior to the date of grant) of 199% (computed with reference to the one year high and low of the market price), dividend yield of 1.76%, contractual life of two to four years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Company’s life, is higher than the volatility of 199% considered above and the Company expects the volatility of its share price to reduce as it matures.

(b) Employee Stock Option Plan – 2005 (ESOP-2005 (Reissue-1)):

During 2007-08, the Company reissued options for 950,500 equity shares of Re. 1/- each to eligible permanent employees and an independent non-executive director, whose is not a promoter, of the Company and its Subsidiaries, forfeited out of Employee Stock Option Plan - 2005 (ESOP-2005) on resignation of employees. The reissue of options forfeited was approved by the Shareholders through postal ballot, whose result was declared on 5th December 2007, and by the Compensation Committee at its meeting held on 12th October 2007. The options will vest over a period of 4 years from the date of grant, viz., 10th December 2007, as follows:

End of Year Date of Vesting % of options grantedII 10th December 2009 30%III 10th December 2010 30%IV 10th December 2011 40%

The exercise period commences from the date of vesting and will expire not later than 5 years from the date of grant, viz., 09th December 2012. The exercise price in the case of employees and directors has been computed by giving discounts, based on the grade of the employees and of fixed amount respectively, to the market price on the date prior to grant date.


The intrinsic value of 950,500 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of four years net of expected forfeiture @ 20% per annum (Previous Year: 20% per annum), is Rs.565,176/- (Previous Year: Rs.587,850/-) and the proportionate amount amortised during the year is Rs.157,325/- (Previous Year: Rs.178,027/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.9,399,002/- (Previous Year: Rs.7,146,277/-).

Further disclosures on ESOP-2005 (Reissue-1) are given below:


Class of Grantees Director Sr. Managers and Above Managers & Below

Date of grant 10.12.2007 10.12.2007 10.12.2007

Number of options granted 60,000 74,971 815,529

Contractual life:

30% of 950,50030% of 950,50040% of 950,500





Method of settlement In Cash In Cash In Cash



Class of Grantees

Directors Sr. Managers and Above

Managers & Below

No. of Options

Weighted Avg.


No. of Options

Weighted Avg.


No. of Options

Weighted Avg.


No. of options outstanding at year beginning

60,000 66.05 34,560 65.55 564,981 65.30

No. of options granted - - - - - -No. of options forfeited - - - 65.55 96,824 65.30No. of options exercised 18,000 66.05 4,604 65.55 43,387 65.30No. of options outstanding at year end 42,000 66.05 29,956 65.55 424,770 65.30No. of options exercisable at year end - - 5,761 65.55 98,785 65.30


Class of Grantees Weighted Average Fair Values (Rs.)Directors 56.56Sr. Managers and above 56.60Managers and below 56.61

The fair values were calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.66.55, weighted average exercise price as per (b) above, volatility in the market price (of the Company’s share over the one year prior to the date of grant) of 170% (computed with reference to the one year high and low of the market price), dividend yield of 0.60%, contractual life of two to four years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Company’s life, is higher than the volatility of 170% considered above and the Company expects the volatility of its share price to reduce as it matures.

(c) Employees Stock Option Plan 2007 for Key Employees: The Company introduced Employees Stock Option 2007 for Key Employees Plan (ESOP-2007 for Key Employees)

during the year 2007-08, under which options for 2,500,000 equity shares of Re. 1/- each were granted to eligible senior management employees of the Company. The scheme was approved by the Shareholders through postal ballot, whose result was declared on 5th December 2007, and by the Compensation Committee of Directors on 12th October 2007. The options will vest over a period of 7 years from the date of grant, viz., 10th December 2007, as follows:

End of Year Date of Vesting % of options grantedIV 10th December 2011 25%V 10th December 2012 25%VI 10th December 2013 25%VII 10th December 2014 25%

The exercise period commences from the date of vesting and will expire not later than 8 years from the date of grant, viz., 09th December 2015. The exercise price is at 10% discount to the market price on the date prior to grant date.


The intrinsic value of 2,500,000 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of seven years net of expected forfeiture of zero % per annum, is Rs.16,625,000/- (Previous Year: Rs.16,625,000/-) and the proportionate amount amortised during the year is Rs.3,156,771/- (Previous Year: Rs.3,156,771/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.26,024,486/- (Previous Year: Rs.26,024,486/-).


Further disclosures on ESOP-2007 for Key Employees are given below: (i) Grantee-wise details of ESOPs granted:

Class of Grantees Senior ManagementDate of grant 10.12.2007Number of options granted 2,500,000Contractual life:

25% of 2,500,00025% of 2,500,00025% of 2,500,00025% of 2,500,000

4 years5 years6 years7 years


Method of settlement In Cash


Particulars No. of Options Weighted Avg. Exercise Price (Rs.)

No. of options outstanding at year beginning 2,500,000 59.90No. of options granted - -No. of options forfeited - -No. of options exercised - -No. of options outstanding at year end 2,500,000 59.90No. of options exercisable at year end - -

The estimated weighted average fair value of each stock option is Rs.61.67. The fair value was calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.66.55, weighted average exercise price as above, volatility in the market price of the Company’s share over the one year prior to the date of grant of 170% (computed with reference to the one year high and low of the market price), dividend yield of 0.60%, contractual life of 4 to 7 years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Company’s life, is higher than the volatility of 170% considered above and the Company expects the volatility of its share price to reduce as it matures.

The impact on Basic and Diluted Earnings Per Share for the year, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.(0.19) and Rs.(0.19) respectively (Previous Year: Rs.(0.24) and Rs. (0.23) respectively).

4. Notes on Cash Flow Statement: (a) The Cash Flow Statement has been prepared using the indirect method specified in Accounting Standard – 3

“Cash Flow Statements”. (b) Cash and cash equivalents at the balance sheet date include unclaimed dividends lying in separate bank accounts

amounting to Rs. 2,732,861/- (Previous year : Rs. 2,608,347/-), not available for use by the Company. (c) The closing cash and cash equivalents excludes fixed deposits amounting to Rs.1,116,838,472/- (Previous Year:

Rs.895,669,529/-), which is considered as part of investing activity by the Company.5. The Company’s operations predominantly relate to one segment, viz., broking and financial services, which constitutes

more than 75% of the total revenues / results / assets of all segments combined. Other activities, which are not related to the main business of broking and financial services, do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Company’s operations are predominantly located in India and hence, separate secondary geographical segment information is also not disclosed.


6. Earnings per share are computed as follows:

Particulars 2009-10 2008-09Net profit before extra-ordinary item – In Rs. 461,767,800 186,292Profit attributable to Equity Shareholders – In Rs. (A) 461,767,800 186,292Net profit after extra-ordinary item – In Rs. 461,767,800 400,186,292Profit attributable to Equity Shareholders – In Rs. (B) 461,767,800 400,186,292Total number of equity shares outstanding at balance sheet date 225,253,625 223,411,864Weighted average number of equity shares outstanding, considered for the purpose of computing Basic EPS (C) 224,198,856 212,040,748Add: Number of potential equity shares to be issued under Employee Stock Option Plans (Previous Year: Number of potential equity shares to be issued under Employee Stock Option Plans and on conversion of warrants issued to BNP Paribas S.A. on preferential basis) 1,792,747 8,422,248Weighted average number of equity shares outstanding, considered for the purpose of computing Diluted EPS (D) 225,991,603 220,462,996Basic EPS before extra-ordinary Item – In Rs. (A/C) 2.06 0.00Diluted EPS before extra-ordinary item – In Rs. (A/D) 2.04 0.00Basic EPS after extra-ordinary Item – In Rs. (B/C) 2.06 1.89Diluted EPS after extra-ordinary item – In Rs. (B/D) 2.04 1.82Nominal value of Equity Shares – In Re. 1.00 1.00

7. Components of Deferred Tax Liability (Net) shown in the Balance Sheet is as follows:

ParticularsAs at 31.03.2010

(Rs.)For the year

(Rs.)As at 31.03.2009

(Rs.)Deferred Tax LiabilityDepreciation 16,590,223 (7,519,698) 24,109,921Deferred Tax AssetProvision for bad & doubtful debts (3,134,703) 21,552,297 (24,687,000)Provision for employee benefits (22,167,230) (20,288,305) (1,878,925)Others - 206,630 (206,630)Total (25,301,933) 1,470,622 (26,772,555)Net (8,711,710) (6,049,076) (2,662,634)

8. The Company changed its name to Geojit BNP Paribas Financial Services Limited w.e.f. 1st April 2009, with the approval of the Registrar of Companies, Kerala.

9. Previous year’s figures have been regrouped / reclassified / recast wherever necessary to conform to current year’s classification.

Schedules 1 to 19 form an integral part of the Consolidated Accounts.Signatures to Schedules 1 to 19.For and on behalf of the Board of Directors A.P. Kurian C.J. GeorgeChairman Managing Director

Jayaraj T.Company Secretary

Place: Kochi Date : 28th May, 2010


(Rs in Lakh)

Particulars Geojit

Investment Services Ltd

Geojit Credits Pvt

Ltd

Geojit Financial

Management Services Pvt

Ltd

Geojit Technologies

Pvt Ltd

Geojit Financial

Distribution Pvt Ltd

Sigma Systems

International FZ LLC

ASSETSFixed Assets (Net Block) 56.05 3.14 - 74.36 0.17 0.68 Sundry Debtors 73.42 - - 119.69 24.31 19.65 Cash & Bank Balances 1,075.58 912.05 0.86 1,731.36 117.84 69.80 Other Current assets 6.34 36.96 - 53.30 8.80 0.01 Loans & Advances 1,010.01 2,790.88 2.33 359.99 128.51 3.19 Investments In subsidiaries /Joint Ventures(Long Term)

80.00 - 1,600.00 24.50 - -

In Mutual Funds&Shares 2,590.45 - - 4,834.67 198.84 - Total Assets 4,891.85 3,743.03 1,603.19 7,197.87 478.45 93.34 LIABILITIESShare Capital 400.00 2,066.57 1,610.00 115.38 5.00 8.58 Reserves 4,387.74 628.88 (7.63) 6,649.37 266.13 56.52 Unsecured Loan - 625.00 - - - - Current Liabilities 119.00 5.46 0.21 120.42 102.20 28.24 Provisions 1.55 417.12 0.61 307.27 105.07 - Deferred Tax Liability/(Asset)

(16.44) 0.00 - 5.42 0.05 -

Total Liabilities 4,891.85 3,743.03 1,603.19 7,197.87 478.45 93.34 INCOMEIncome from Operations 349.89 179.48 6.28 716.48 201.19 97.18 Other Income 210.18 106.25 - 320.63 17.00 0.76 Turnover/Total Income 560.07 285.73 6.28 1,037.11 218.19 97.94 EXPENDITUREEmployee Costs 36.77 29.27 - 258.50 - 44.05 Operating Expenses 40.44 21.03 5.05 9.25 111.24 - Establishment & Other Expenses

19.76 - 0.54 127.01 1.90 36.56

Depreciation / Amortisation

32.22 1.57 - 18.33 0.08 0.38

Finance Charges 0.75 3.23 - - - - Profit Before Taxation from ordinary activities

430.13 230.63 0.68 624.01 104.97 16.94

Provision for Taxation from ordinary activities

112.72 70.20 0.25 172.97 30.33 -

Profit After Taxation from ordinary activities

317.41 160.43 0.43 451.04 74.63 16.94

FINANCIAL INFORMATION OF SUBSIDIARIES

GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITEDRegistered Office: 5th Floor, Finance Towers,

Kaloor, Kochi – 682 017.

ATTENDANCE SLIP16th ANNUAL GENERAL MEETING – 12th July 2010

For shares held in Dematerialised Form : DP ID. …………………………… Client ID No. ……………………………...

For shares held in Physical Form : Reg. Folio No. …………………………………………………………………..

No. of shares ………………………………………………………………………………

I/We hereby record my/our presence at the Annual General Meeting of the Company at Hotel International, Veekshanam Road, Kochi – 682035 at 4.00 p.m. on 12th July 2010.

……………………………………………… ……………………………… Name of Member/Proxy (In block letters) Signature of Member/Proxy

Note: Please fill up this Attendance Slip and hand it over at the entrance of the Meeting Hall.___________________________________________________________________________________________________________

GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITEDRegistered Office: 5th Floor, Finance Towers,

Kaloor, Kochi – 682 017.

PROXY FORM

For shares held in Dematerialised Form : DP ID. …………………………… Client ID No. ……………………………...

For shares held in Physical Form : Reg. Folio No. …………………………………………………………………..

No. of shares ………………………………………………………………………………

I/We …………………………………………… residing at ……………………………………………………………………………… being a Member / Members of GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITED hereby appoint Mr/Ms ……………………………………… residing at ………………………………………………………………………………

or failing him/her, Mr/Ms ……………………………………… residing at ……………………………………… as my/our proxy to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the Company, to be held on 12th day of July 2010 and at any adjournment thereof.

Signed this …………… day of …………………………… 2010.

Signature of the Shareholder(s) Affix

One RupeeRevenueStamp

NOTE: This form duly completed and signed must be deposited at the Registered Office of the Company not less than 48 hours before the Meeting. A PROXY NEED NOT BE A MEMBER.

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